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

Shmuel Kandel; Oded Sarig; Avi Wohl

doi:10.1016/s0378-4266(00)00131-x

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

Shmuel Kandel, Oded Sarig, Avi Wohl

Research output: Contribution to journal › Article › peer-review

49 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 language	English
Pages (from-to)	1543-1551
Number of pages	9
Journal	Journal of Banking and Finance
Volume	25
Issue number	8
DOIs	https://doi.org/10.1016/s0378-4266(00)00131-x
State	Published - Aug 2001
Externally published	Yes

Keywords

Auctions
D44
D49
G12
IPO
Price clustering
Round numbers

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10.1016/s0378-4266(00)00131-x

Cite this

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title = "Do investors prefer round stock prices? Evidence from Israeli IPO auctions",

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.",

keywords = "Auctions, D44, D49, G12, IPO, Price clustering, Round numbers",

author = "Shmuel Kandel and Oded Sarig and Avi Wohl",

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KW - D49

KW - G12

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KW - Price clustering

KW - Round numbers

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

Abstract

Keywords

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