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

Authors
Kandel, S Sarig, O Wohl, A
Citation
S. Kandel et al., Do investors prefer round stock prices? Evidence from Israeli IPO auctions, J BANK FIN, 25(8), 2001, pp. 1543-1551
Citations number
13
Categorie Soggetti
Economics
Journal title
JOURNAL OF BANKING & FINANCE
ISSN journal
03784266 → ACNP
Volume
25
Issue
8
Year of publication
2001
Pages
1543 - 1551
Database
ISI
SICI code
0378-4266(200108)25:8<1543:DIPRSP>2.0.ZU;2-C
Abstract
We find round number clustering in orders submitted by investors in Israeli IPO auctions. Explanations offered for price clustering, such as dealer co llusion or implicit agreement to simplify negotiations, cannot explain pric e clustering in this market. Therefore. this is direct evidence that invest ors prefer round numbers. (C) 2001 Elsevier Science B.V. All rights reserve d.