The case studies the role of behavioural biases in real estate development by focusing on a 11 particular anomaly, namely, the sunk cost fallacy. By using land and house sale prices in 12 Beijing, China between 2003 and 2013, the case offers a unique opportunity to analyse the 13 effect of ‘human factors’ in real estate development decision-makings. The case can be used 14 as an introduction to behavioural economics and its application in real estate research. It can 15 also facilitate discussions on real estate development, urban economics, and quantitative 16 research methods in real estate analysis.