Ye Xu

Purpose - Traditional finance theory have developed on the basis of expected utility theory and assumes that investors are rational. However, recent developments in behavioural finance challenge this, and thus question the validity of the assumptions on which expected utility theory are based. However, existing studies on this matter have mainly focused on capital markets, and research in the property industry has tended to lag behind. Therefore, adopting UK property professionals as samples, this paper aims to explore the reliability of the invariance assumption of people's behaviour under expected utility theory. Design/methodology/approach - To fulfil the aim of this paper, a questionnaire survey was undertaken among the property professionals in London during the second half of 2005. Benefited from the group administrative method 78 out of 99 questionnaires were returned, and this reflects an overall response rate of approximately 79 per cent. Findings - The research identifies that among the tested UK samples, property professionals change their preferences according to the way the questions are presented. In other words, the invariance assumption is not valid among UK property professionals. This paper then further investigates the possible factors that might influence people's decisions. It suggests that people would change their choices anyway, regardless of their gender, age, degree subjects or their working experience in the property industry. Therefore, further research is needed to find some other factors that might influence this particular behaviour among UK property professionals. Originality/value - This paper draws the industry attention to the use of existing investment models, and suggests that an understanding of people's behaviour could help to improve decision making.

Purpose - Studies regarding rational decision have been conducted over many years and one of the common understandings of rationality in financial terms is that investors are assumed to be risk averse. However, in a previous paper, Xu and Dent, identify that property professionals in both the UK and China do not behave in a rational manner as assumed by traditional finance models. This is because the sample in the study is risk seeking when the probabilities of receiving capital gains are low. This current paper aims to explore whether university training would influence the respondents" risk preferences. A survey of undergraduate and postgraduate real estate students at Oxford Brookes University was used to investigate the potential of university training to improve people's decision making, so as to enhance the rationality of their behaviour. Design/methodology/approach - A survey of undergraduate and postgraduate real estate students at Oxford Brookes University was conducted during the academic year 2007/2008 to investigate the potential of university training to improve people's decision making, so as to enhance the rationality of their behaviour. In total, there were 206 students participated in the survey (156 undergraduates and 52 postgraduates). Findings - This paper finds that preferences of Oxford Brookes University students seem likely to change once the same question is phrased differently. This preference is more relevant to the university training they received than their gender. After three years" study at universities, students seem more likely to make rational decisions, i.e. similar to normative theory suggestions regarding the actions of rational people. Originality/value - This paper is only a start of behavioural research of people's decision making, and further studies could also cover areas such as property experts' decision-making process or validity of other assumptions of expected utility theory.