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How fear of missing out can lead to you paying more when buying a home

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How fear of missing out can lead to you paying more when buying a home


home
Credit: Pixabay/CC0 Public Domain

The property market is a competitive space where finding a nice home, in the area you want and at a price you can afford, is a hard thing to do.

With buyers outnumbering available properties, the pressure is even greater, causing some would-be buyers to develop a fear of missing out (FOMO) and to make irrational decisions.

FOMO might make you worry that others are finding nicer homes and getting better deals, or that prices will rise to the point where you are priced out of the market altogether. This could cause you to pay too much or to buy a property in an area unsuitable for your needs.

Then there is fear of making a mistake (FOMM), which can also cause problems if you’re a home hunter. You might be reluctant to bid or to negotiate because you are afraid of choosing the wrong property or paying more than it’s worth.

Problems caused by FOMO and FOMM

The principles of contagion theory, crowd psychology and the scarcity principle we identified in our research on panic-buying during the pandemic can be applied to any purchasing decisions. In this instance, we applied them to buying properties in a competitive housing market.

Contagion theory applies when people act irrationally under the influence of a crowd. Crowd psychology is similar but relates to how a crowd behaves in certain circumstances, while the scarcity principle is the idea that if there are fewer items available, their value increases.

Each of these can increase the likelihood of several behaviors when purchasing a property. These include:

  • Underbidding and overbidding: Fearing other buyers might get the house, house hunters might get caught up in a bidding war and end up paying more than planned.
  • Conversely, buyers with FOMM might fear spending too much, so bid too low to start with and risk losing the house.
  • Following the crowd and peer pressure influence: Buyers might feel pressured to buy in a certain area because it’s popular, even if it is not best fit for them. This can lead to paying more for a house just because others are doing the same.
  • Delaying decisions: FOMM can lead to taking too long to decide. This delay can mean missing out on good deals or being forced to rush into a decision and end up overpaying.
  • Avoiding negotiation: Some buyers might avoid negotiating the price or special conditions such as building and pest inspections and finance approval because they fear the seller will reject their offer. This can result in paying more than they need to if there are problems later.
  • Excessive inspections and appraisals: While inspections and appraisals are important, too many can suggest indecisiveness driven by fear, resulting in wasted money on unnecessary assessments, and more importantly, wasted time and delayed decisions.

Removing fear from the buying process

Start with thorough research and preparation by learning about different neighborhoods and house prices. The history of properties and suburbs can be found for free on property websites and it is a good place to start.

Seek professional guidance from real estate agents or financial advisers to help you through the process.

Get insights on market trends from an agent from a selling company or bank to help find homes that meet your criteria. Keep in mind these agents will get some form of incentive from your purchase.

All the big banks or loan officers can provide free property reports on specific properties or suburbs.

Don’t forget to check council mapping and water authority documents to check for potential future road projects and other developments and for an area’s flood rating.

Perform due diligence by thoroughly inspecting properties and reviewing contracts to ensure they meet your needs and are a good investment.

For example, it is a good idea to hire a home inspector to check for any hidden issues before making an offer.

Another common mistake made by most buyers is not asking their solicitor to check and give suggestions before signing a contract or offer.

A solicitor can check the sale contract before you sign, review the disclosure documents, give advice on your mortgage contract, carry out title searches and explain the results and explain how the purchase may affect your liability for land tax.

Do some contingency planning by preparing for unexpected price increases and for the presence of other strong bidders to reduce anxiety about making the wrong decision. Setting aside extra funds could help deal with higher than expected prices or unexpected repairs that need doing.

In the end, plan well and make decisions without letting emotions take over. Taking your time to find the right home that fits your budget and goals, rather than rushing into a purchase due to fear of missing out or making a mistake.

Provided by
The Conversation


This article is republished from The Conversation under a Creative Commons license. Read the original article.The Conversation

Citation:
How fear of missing out can lead to you paying more when buying a home (2024, June 26)
retrieved 26 June 2024
from https://phys.org/news/2024-06-paying-buying-home.html

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Creating 3D shapes from a flat surface using LEDs

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Creating 3D shapes from a flat surface using LEDs


ETRI creates 3D shapes from a flat surface using LEDs
Tactile Display Structure and Operation Principle. Credit: Electronics and Telecommunications Research Institute(ETRI)

A team of South Korean researchers has developed an innovative haptic (tactile) display technology that is attracting global attention. This innovation allows users to physically experience 3D shapes and various textures, opening up potential applications in information delivery devices for the visually impaired, vehicle interfaces, metaverse applications, educational tools, and more.

Electronics and Telecommunications Research Institute (ETRI) announced the development of a display technology that generates three-dimensional tactile sensations using a photo-thermal elastic variable film. The results of this research were published in Nature Communications on March 22nd and were selected as a featured article.

This technology uses infrared light-emitting diodes (LEDs) to adjust the intensity of light, enabling precise control of the height and elasticity of tactile elements with sizes of several millimeters (mm) on a smooth film surface.

The tactile display developed by ETRI can directly represent braille, text, and various three-dimensional shapes. The key differentiator is its ability to finely control elasticity and temperature for different sections, accurately reproducing varying heights and textures.

The core of this technology lies in a functional polymer film structure composed of two thin layers, as thin as a strand of hair. The lower photo-thermal layer, facing the LED, absorbs light and generates heat. The upper variable elastic layer is hard at room temperature but becomes very soft when the heat from the photo-thermal layer causes it to undergo a glass-to-rubber transition at around 50 degrees Celsius.

ETRI creates 3D shapes from a flat surface using LEDs
3D Shape and Elasticity Representation by the Tactile Display. Credit: Electronics and Telecommunications Research Institute(ETRI)

In this state, applying air pressure underneath the film causes it to swell according to the amount of heat absorbed, creating a tactile 3D shape. The maximum height of the 3D shape produced by a 4mm diameter element is 1.4mm, about twice that of a typical braille display, and can be finely controlled in 0.1mm increments based on the intensity of the LED light.

Notably, when the light is turned off, the upper layer cools and hardens again, allowing the shape to withstand touch without consuming additional power.

The research team focused on developing 3D elements based on light-responsive thermoelastic variable materials and a sensory perception model for 3D deformation.

Inwook Hwang, who is the first author of the paper and also ETRI’s principal researcher, explained, “Conventional braille tactile displays could only express simple shapes and had fixed heights. Our new technology allows each cell’s height and elasticity to be freely controlled, enabling the creation of realistic 3D terrains and textures.”

Sungryul Yun, the director of the Tangible Interface Creative Research Section at ETRI, added, “This innovative achievement elevates tactile display technology to a higher level. We plan to integrate large-area light sources and tiling technologies to expand to large 3D displays while enhancing cell resolution and maximizing energy efficiency.”

This technology has the potential to enable advanced 3D information delivery for the visually impaired, adaptive user interfaces in vehicles, tactile communication, and realistic educational models, making immersive tactile interaction a reality.

More information:
Inwook Hwang et al, Height-renderable morphable tactile display enabled by programmable modulation of local stiffness in photothermally active polymer, Nature Communications (2024). DOI: 10.1038/s41467-024-46709-7

Citation:
Creating 3D shapes from a flat surface using LEDs (2024, June 26)
retrieved 26 June 2024
from https://techxplore.com/news/2024-06-3d-flat-surface.html

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Researchers capture detailed picture of electron acceleration in one shot

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Researchers capture detailed picture of electron acceleration in one shot


Detailed picture of electron acceleration captured in one shot
Experimental setup. A laser pulse was focused on a two-stage gas jet to produce electron and betatron x rays. (a) and (b) The schematic of the laser-target geometry in the two cases, respectively. The red arrows represent the laser trajectories. (c) Measured averaged transverse neutral gas density distribution at a backing pressure of 4.1 MPa and gas density profiles at different heights above the nozzle for the accelerator. Credit: Physical Review Letters (2024). DOI: 10.1103/PhysRevLett.132.225001

Adjusting experimental methods achieved the first “single-shot” diagnosis of electron acceleration through a laser wakefield accelerator along a curved trajectory, according to a recent study led by University of Michigan researchers. The findings are published in the journal Physical Review Letters.

This optical-based technique could help engineers develop more powerful electron accelerators for fundamental studies of quantum and particle physics—or more compact accelerators for use in medicine and industry.

Compared to traditional accelerators which can be kilometers long, laser wakefield accelerators can apply 1000 times more energy per meter, allowing a vastly more compact design able to fit into a large room.

The device fires a laser through a vapor, creating an ionized plasma, then separates electrons from ions which creates a “wakefield,” similar to the wake a boat leaves behind as it moves through water. It then injects an electron beam into the accelerator which “surfs” on the wake, gaining energy rapidly.

“The beam of particles that comes out of a laser plasma accelerator is so short in duration, it would take less time for light to cross the width of a hair. The whole acceleration process is so fast, on a trillionth-of-a-second time scale, that it is extremely difficult to measure,” said Alexander Thomas, a professor of nuclear engineering and radiological sciences, electrical engineering and computer science and physics at U-M and senior author of the study.

Up to this point, electron acceleration processes have been measured through multiple experimental runs, called a multi-shot mode, but those methods rely on the stability and reproducibility of the accelerator—leaving room for variations between experiments.

“It is essential to precisely diagnose the electron acceleration process to maximize the electron energy gain. This could be a crucial step pushing forward the development of the future teraelectronvolt (TeV) level lepton colliders used to understand the fundamental laws of nature,” said Thomas.

The research team accomplished single-shot electron acceleration diagnosis during an experiment conducted on a laser wakefield accelerator at the Advanced Laser Light Source of the Institut National de la Recherche Scientifique in Quebec, Canada.

The technique relies on a phenomenon that occurs during laser wakefield acceleration known as “betatron X-ray radiation” where electrons emit high energy photons in the X-ray region of the electromagnetic spectrum while oscillating transversely.

“In our work, we steer the intense laser light with a plasma density ramp so that the laser light follows a curved trajectory, as does the electron beam accelerated in the wake of the laser light,” said Yong Ma, an assistant research scientist of nuclear engineering and radiological sciences at U-M and corresponding author of the study.

The photons emitted by the electron always follow the tangent direction of its instantaneous trajectory. Thus, photons emitted at different times appear at different angles and thus different spatial locations on a screen.

The properties of the photons, namely photon energies and angular distribution, are completely determined by the properties of the electron beam. Therefore, by measuring the properties of the spatially resolved photon, the researchers were able to piece together the electron acceleration process from a single experiment.

“We had this basic idea using the so-called ‘betatron streaking’ technique seven years ago and we demonstrated its feasibility using numerical simulations. It was quite an exciting and fun experience to perform an experiment based on numerical simulations and get expected experimental results,” said Ma.

“It is a great result that could open new avenues for a detailed understanding of laser-plasma accelerators,” said Dr. Daniel Seipt of the Helmholtz-Institute Jena, a senior author of the study who provided the theoretical support.

Results could find applications in advanced control of laser beam and particle propagation—for example, developing curved plasma channels for coupling multistage laser wakefield accelerators.

A multistage wakefield accelerator would overcome the energy limitations of a single-stage accelerator, achieving higher energies for particles. These high energies could be used for quantum mechanics experiments, similar to those done on the Large Hadron Collider at the CERN, but on a smaller, less expensive scale.

Beyond quantum exploration, multistage laser wakefield accelerators could eventually be applied for practical use for targeted tumor destruction in cancer treatments or cutting materials with limited heat damage in industrial settings.

More information:
Y. Ma et al, Single-Shot Diagnosis of Electron Energy Evolution via Streaked Betatron X Rays in a Curved Laser Wakefield Accelerator, Physical Review Letters (2024). DOI: 10.1103/PhysRevLett.132.225001

Citation:
Researchers capture detailed picture of electron acceleration in one shot (2024, June 26)
retrieved 26 June 2024
from https://phys.org/news/2024-06-capture-picture-electron-shot.html

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Stress testing pension funds—researchers present technique based on hidden Markov regime switching model

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Stress testing pension funds—researchers present technique based on hidden Markov regime switching model


Stress testing pension funds: Lithuanian researchers lead global innovation
Distribution of returns of IInd pillar PFs. Manager is given in the legend, while the participant’s birth-year is attributed to the title of image panel. The special case “T” stands for the asset preservation PFs. Credit: Annals of Operations Research (2024). DOI: 10.1007/s10479-024-06041-1

“We wanted to investigate how second pillar pension funds react to financial crises and how to protect them from the crises,” says Kaunas University of Technology (KTU) professor Dr. Audrius KabaÅ¡inskas, who, together with his team, discovered a way to achieve this goal. The discovery in question is the development of stress tests for pension funds. Lithuanian researchers were the first in the world to come up with such an adaptation of the stress tests.

Stress tests are usually carried out on banks or other financial institutions to allow market regulators to determine and assess their ability to withstand adverse economic conditions.

According to the professor at KTU Faculty of Mathematics and Natural Sciences, this innovative pension fund stress testing approach will benefit both regulators and pension fund managers.

“Making sure your pension fund is resilient to harsh financial market conditions will help you sleep better, save more, and have increased trust in your funds and the pension system itself,” KabaÅ¡inskas adds.

Results based on two major crises

First, the study needed to collect data from previous periods. “Two major events that shocked the whole world—COVID-19 and the first year of Russian invasion of Ukraine—just happened to occur during the project. This allowed us to gather a lot of relevant information and data on changes in the performance of pension funds,” says KabaÅ¡inskas.

The Hidden Markov Model (HMM), which, according to a professor at KTU Department of Mathematical Modelling, is quite simple in its principle of operation, helped to forecast future market conditions in this study.

The paper is published in the journal Annals of Operations Research.

“The observation of air temperature could be an analogy for it. All year round, without looking at the calendar, we observe the temperature outside and, based on the temperature level, we decide what time of the year it is. Of course, 15 degrees can occur in winter and sometimes it snows in May but these are random events. The state of the next day depends only on today,” he explains vividly.

According to the KTU researcher, this describes the idea of the Hidden Markov Model: by observing the changes in value, one can judge the state of global markets and try to forecast the future.

“In our study, we observed two well-known investment funds from 2019 to 2022. Collected information helped us identify that global markets at any given moment are in one of four states: no shock regime, a state of shock in stock markets, a state of shock in bond markets, and a state of global financial shock—a global crisis,” says KabaÅ¡inskas.

Using certain methods, the research team led by a professor MiloÅ¡ Kopa representing KTU and Charles University in Prague found that these periods were aligned with the global events in question. Once the transition probabilities between the states were identified, it was possible to link the data of pension funds to these periods and simulate the future evolution of the pension funds’ value.

That’s where the innovation of stress testing came in. The purpose of this test is to determine whether a particular pension fund can deliver positive growth in the future when faced with a shock in the financial markets.

“In our study, we applied several scenarios, extending financial crises and modeling the evolution of fund values over the next 5 years,” says a KTU researcher.

This methodology can be applied not only to pension funds but also to other investments.

Example of Lithuanian pension funds

The research and the new stress tests were carried out on Lithuanian pension funds.

Kabašinskas says that the study revealed several interesting things. Firstly, on average, Lithuanian second pillar pension funds can withstand crises that are twice as long.

“However, the results show that some Lithuanian funds struggle to cope with inflation, while others, the most conservative funds for citizens who are likely to retire within next few years or who have already retired, are very slow in recovering after negative shocks,” adds the KTU expert.

This can be explained by regulatory aspects and the related investment strategy, as stock markets recover several times faster than bond markets, and the above-mentioned funds invest more than 90% in bonds and other less risky instruments.

A complementary study has also been carried out to show how pension funds should change their investment strategy to avoid the drastic negative consequences of various financial crises and shocks.

“Funds that invest heavily in stocks and other risky instruments should increase the number of risk-free instruments slightly, up to 10%, before or after the financial crisis hits. Meanwhile, funds investing mainly in bonds should increase the number of stocks in their holdings. In both cases, the end of the crisis should be followed by a slow return to the typical strategy,” advises a mathematician.

Although the survey did not aim to increase people’s confidence in pension funds, the results showed that Lithuania’s second pillar pension funds are resilient to crisis and are worth trust. Historically they have delivered long-term growth, some have even outperformed inflation and price increases.

“Although short-term changes can be drastic, long-term growth is clearly visible,” says KTU professor Dr. KabaÅ¡inskas. “Lithuania, by the way, has a better system than many European countries,” he adds.

More information:
Audrius Kabašinskas et al, Stress testing for IInd pillar life-cycle pension funds using hidden Markov model, Annals of Operations Research (2024). DOI: 10.1007/s10479-024-06041-1

Citation:
Stress testing pension funds—researchers present technique based on hidden Markov regime switching model (2024, June 26)
retrieved 26 June 2024
from https://phys.org/news/2024-06-stress-pension-funds-technique-based.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.





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