The Psychology of Manipulation and Fraud in the Housing Market

Abstract

Theoretical background: This article analyzes the psychological and economic mechanisms of manipulation and psychological games in the real estate market, focusing on information asymmetry, cognitive biases, and the impact of emotions on purchasing decisions. It discusses key manipulative techniques used by market entities, their effects, and their implications for the stability of the housing market. Particular attention is given to the role of behavioral economics in explaining consumer behavior and potential measures to counteract unethical practices.

Purpose of the article: The aim of this article is to identify and analyze the mechanisms of manipulation employed in the real estate market, assess their impact on consumer decision-making, and examine their consequences for market stability and functioning. Furthermore, the article seeks to formulate recommendations for strategies to combat unethical practices, with a particular emphasis on the role of regulations, consumer education, and modern technologies — such as blockchain and artificial intelligence — in enhancing market transparency.

Research methods: The study was conducted using an online survey (CAWI) among 96 respondents with diverse demographic profiles. The research focused on perceptions of manipulative techniques, sources of information, and consumer responses to manipulation.

Main findings: The findings confirm the widespread presence of manipulation in the real estate market and its significant consequences for consumers and market stability. As many as 62.5% of respondents reported encountering unethical practices, yet only 10.5% took action to hold manipulative entities accountable, while 25.3% did not react at all. The most frequently cited consequences included rising property prices (67%), reduced access to housing (44%), and market destabilization (41%), which particularly affect lower-income social groups. An analysis of information sources revealed that consumers most often rely on the Internet and recommendations from acquaintances, while specialized publications are rarely consulted. Only 30.2% of respondents always verify the information they obtain, increasing their susceptibility to manipulation. Emotions play a key role in the decision-making process, making consumers vulnerable to time pressure, scarcity effects, and selective presentation of information. The article highlights the urgent need for more effective regulations and consumer education in recognizing manipulative techniques. In this context, new technologies present significant potential solutions. Blockchain can enhance market transparency by eliminating data falsification, while artificial intelligence can support the detection of market anomalies and pattern analysis to prevent fraudulent practices.