The Concept of Authority Bias Has Strong Influence in Real Estate Investment

A private obviously has to obey what the colonel says. However, it would be safe to assume that any random person would believe in the words of a colonel even if the discussion is not about the military. The people would stock to those words, and it is usually due to an obsession with the authority.

We justify the words from an authority in our own minds, and it is the common logical fallacy. However, just because a person occupies top position, it doesn’t really mean that it would always be true what that person believes in.

Milgram Experiments

Milgram’s experiment has been one of the most disturbing experiments regarding the analysis of person’s behavior in response to the commands by higher authority, leading to the revelation of different aspects of authority bias.

The researcher begins to explain the procedures to be followed. He says that the experiment is a study of how punishment affects learning and memory. Therefore, one participant will have the task of learning pairs of words in a long list until each pair can be recalled perfectly; this person is to be called the Learner. The other participant’s job will be to test the Learner’s memory and to deliver increasingly strong electric shocks for every mistake; this person will be designated the Teacher” (Cialdini 175).

The test starts well, but as the process is carried forward, the punishment on every mistake in increased. Eventually, the shocks become unbearable and learner pleads to stop.

The test has been run multiple times and it gave the same results, leading the researchers to understand why normal people would follow the orders by the likes of Hitler. It ultimately proves that people put more stock in the words that are issued by authorities.

How to be defensive against authority bias?

Being mindful is the best defense that you can put forward against the authority bias. Like what’s said in Cialdini:

One protective tactic we use against authority status it to remove its elements of surprise. Because we typically misperceive the profound impact of authority (and its symbols) on our actions, we become insufficiently cautious about its presence in compliance situations. A fundamental form of defense against this problem, therefore, is a heightened awareness of authority power” (191).

Real estate investment and the role of authority

Business ethics should be the top priority while investing in real estate. While we can certainly show off our authority to make the unsuspecting customer to buy overpriced junk, it doesn’t change the fact that such an action is unethical due to which it is the reputation that is going to take the bigger hit. The ultimate disadvantage is that people wouldn’t want to listen even about your most valuable insight in a certain matter.

So, let’s conclude with the Will Rogers’s words; “It takes a lifetime to build a good reputation, but you can lose it in a minute.

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