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

^*Corresponding author for this work

Coller School of Management

Tel Aviv University
University of Pennsylvania
Reichman University

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

51 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

Keywords

Auctions
D44
D49
G12
IPO
Price clustering
Round numbers

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10.1016/S0378-4266(00)00131-X

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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",

year = "2001",

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AU - Kandel, Shmuel

AU - Sarig, Oded

AU - Wohl, Avi

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N2 - 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.

AB - 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.

KW - Auctions

KW - D44

KW - D49

KW - G12

KW - IPO

KW - Price clustering

KW - Round numbers

UR - https://www.scopus.com/pages/publications/0006215409

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JF - Journal of Banking and Finance

IS - 8

ER -

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

Abstract

Keywords

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