Browsing by Author "Wang, Amanda Ling Qian"
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- ItemInvestor psychological bias towards number preferences in stock price endings : rationality vs irrationality : a research thesis submitted in fulfillment of the requirement of the degree of Masters in Business Studies (Fin) at Massey University(Massey University, 2011) Wang, Amanda Ling QianConsumer reactions towards products that end with $X.99 have been heavily researched in the marketing literature. My study has found psychological bias towards numbers in finance prices, where there is a positive return for prices ending in $X.01 and a negative return for prices ending in $X.99 for the American and Chinese Markets, with the return difference annualised to 22.65% and 54.43% per year, respectively. I find there are more buyer initiated stocks for stocks ending with the digit 9. This is not the same as consumer psychological bias, where consumers consider prices that end with 9 to be much cheaper than those ending in other digits. Rather, the case here is a rationality response to psychological bias. This would also explain why I did not find excessive buys in the Chinese market in relation to lucky numbers, as is found in the marketing literature.
