Producers’ preferences for round number prices

Joni M. Klumpp, B Wade Brorsen and Kim B. Anderson

Agricultural Finance Review, 2007, vol. 67, issue 2, pages 377-385

Abstract: The purpose of this study was to determine if a preference for round prices exists in the wheat market and how wheat sales react to price movements around whole-dollar amounts. The results show round prices are slightly more prevalent than non round prices, and transactions increase when price moves above a whole-dollar amount. While such predictable behavior could be exploited by speculators in other markets, the effect is not large enough to merit concern in the market studied here.

Keywords: Behavioral finance; Round prices; Threshold prices; Wheat (search for similar items in EconPapers)
Date: 2007

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