Does Price Influence Assessment of Fundamental Value? Experimental Evidence

Sylvain Marsat () and B Williams
Additional contact information
Sylvain Marsat: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand
B Williams: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand

Post-Print from HAL

Abstract: Assessing the fundamental value of a firm is a difficult task. Theoretically, the market price is exogenous and should not be used in the estimation. We performed a simple experiment to pinpoint whether price is used in fundamental value calculation. Subjects were given similar information on a firm. In the first/control situation, no price was submitted. In the second situation, the actual price was submitted to them. In the third one, a manipulated, overvalued price was provided. We find that the price provided, whatever it is, proves to have a clear impact on the subjects' estimations. This is consistent with the anchoring-and-adjustment hypothesis of fundamental assessment and has implications for a better understanding of financial bubbles.

Keywords: fundamental value; price; experiment; anchoring (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://hal.science/hal-02156599
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in Journal of Behavioral Finance, 2013, 14 (4), pp.268-275. ⟨10.1080/15427560.2013.848866⟩

Downloads: (external link)
https://hal.science/hal-02156599/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02156599

DOI: 10.1080/15427560.2013.848866

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().