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| Author: | Sonnemans, J. |
| Title: | Price clustering and natural resistance points in the Dutch stock market: A natural experiment |
| Journal: | European Economic Review
2006 : NOV, VOL. 50:8, p. 1937-1950 |
| Index terms: | stock markets share prices currency Netherlands |
| Freeterms: | price clustering |
| Language: | eng |
| Abstract: | This paper focuses on the tendency of stock prices to cluster at round numbers (here as: r-no./r-nos.) and the related effect of r-no. price barriers. Using data from the Dutch stock market of the period 1990-2001, two competing hypotheses are tested. The aspiration level hypothesis predicts that r-no. effects in guilders will only slowly disappear. The odd price hypothesis (as: o-p-hyp.) predicts a change in r-no. effects after 1 Jan. 1999. In general, the results are consistent with the o-p-hyp. |
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