Do investors prefer round stock prices? Evidence from Israeli IPO auctions

Shmuel Kandel, Oded Sarig, Avi Wohl

Research output: Contribution to journalArticlepeer-review

47 Scopus citations

Abstract

We find round number clustering in orders submitted by investors in Israeli IPO auctions. Explanations offered for price clustering, such as dealer collusion or implicit agreement to simplify negotiations, cannot explain price clustering in this market. Therefore, this is direct evidence that investors prefer round numbers.

Original languageEnglish
Pages (from-to)1543-1551
Number of pages9
JournalJournal of Banking and Finance
Volume25
Issue number8
DOIs
StatePublished - Aug 2001
Externally publishedYes

Keywords

  • Auctions
  • D44
  • D49
  • G12
  • IPO
  • Price clustering
  • Round numbers

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