Anchoring under Currency Substitution: A Ratchet Price Mechanism in the Housing Market
研究了以色列房地产市场中，货币替代期间汇率波动如何通过锚定效应产生向上的棘轮价格机制，并在货币替代完成后消失。
Abstract The currency substitution experienced by the Israeli real estate market in the past decades serves as a unique case for studying the effect of the anchoring heuristic on prices. We hypothesize that players utilize current and past exchange rates between the old and new currency to affect the closing price in their favor. Results of micro‐ and macro‐level estimations indicate that exchange rate fluctuations associate with an upward ratchet price effect. Furthermore, we find that the ratchet price mechanism disappears once the currency substitution is completed. These findings provide new evidence of the effect of anchoring on a market whose transactions involve substantial, long‐term economic consequences.