Key Takeaways
- Five cognitive biases (loss aversion, anchoring, herd behavior, recency bias, sunk cost fallacy) are particularly dangerous during crises.
- Pre-commitment decision rules, established before a crisis, remove emotional decision-making from the process.
- The crisis triage matrix evaluates properties on cash flow, equity, tenant stability, and strategic value to prioritize attention.
- Monthly matrix reviews during active crises ensure resources flow to properties with the greatest survival contribution.
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Test Your Knowledge
1.Which cognitive bias causes investors to hold losing positions too long rather than accepting a realized loss?
2.What is the purpose of pre-commitment decision rules in crisis management?
3.In the crisis triage decision matrix, which properties are disposition candidates?