EconPapers    
Economics at your fingertips  
 

Psychological Factors and Stock Option Exercise

Chip Heath, Steven Huddart () and Mark Lang

The Quarterly Journal of Economics, 1999, vol. 114, issue 2, 601-627

Abstract: We investigate stock option exercise decisions by over 50,000 employees at seven corporations. Controlling for economic factors, psychological factors influence exercise. Consistent with psychological models of beliefs, employees exercise in response to stock price trends—exercise is positively related to stock returns during the preceding month and negatively related to returns over longer horizons. Consistent with psychological models of values that include reference points, employee exercise activity roughly doubles when the stock price exceeds the maximum price attained during the previous year.

Date: 1999
References: Add references at CitEc
Citations: View citations in EconPapers (151) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1162/003355399556089 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:qjecon:v:114:y:1999:i:2:p:601-627.

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Elhanan Helpman, Lawrence F. Katz and Andrei Schleifer

More articles in The Quarterly Journal of Economics from Oxford University Press
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2019-07-22
Handle: RePEc:oup:qjecon:v:114:y:1999:i:2:p:601-627.