NumericalDecision Processing causing stock price clustering?

Bodo Vogt, Andreas Uphaus and Wulf Albers
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Bodo Vogt: Bielefeld University, Institut f³r mathematische Wirtschaftsforschung (IMW), Bielefeld, Germany
Andreas Uphaus: Bielefeld University, Institut f³r mathematische Wirtschaftsforschung (IMW), Bielefeld, Germany
Wulf Albers: Bielefeld University, Institut f³r mathematische Wirtschaftsforschung (IMW), Bielefeld, Germany

Homo Oeconomicus, 2001, vol. 18, 229-240

Abstract: The stock price clustering phenomenon has been studied in the context of numerical perception and response. The numerical response process of the theory of prominence models how persons generate numerical responses if they have diffuse numerical information (know a range of reasonable alternatives). These predictions are compared with empirical data (the inside quotes of 30 stocks traded on the IBIS computer exchange in March/April 1993). The numerical response process predicts the principal structure of the data. A similarity was observed between the quotes and a laboratory experiment in which the diffuse numerical information has been controlled.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:hom:homoec:v:18:y:2001:p:229-240

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