Proceedings of the 9th Joint International Conference on Information Sciences (JCIS-06)

Effect of price quoting on financial assets price

Authors
Tal Shavit1, Shosh Shahrabani, Uri Benzion
1The Open University of Israel
Corresponding Author
Tal Shavit
Available Online October 2006.
DOI
10.2991/jcis.2006.179How to use a DOI?
Keywords
Behavioral Finance, Experiment, Myopic Loss Aversion, WTP, WTA.
Abstract

Stock options are usually sold in bundles of 100 units, and their price can be quoted either per unit or per bundle. In this paper, the effect of different methods of quoting financial asset prices on the subjective value of a contract was examined experimentally. In particular, we examined differences in subjects’ Willingness-To-Pay (WTP) and Willingness-To-Accept (WTA) for financial assets depending upon whether prices are quoted per unit or per bundle. We found that subjects bid (ask) a higher price when prices are quoted per unit than when they are quoted per bundle. The results indicated that different quoting methods affect the bidding price for risky assets. These results can have important implications for trading on financial markets.

Copyright
© 2006, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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Volume Title
Proceedings of the 9th Joint International Conference on Information Sciences (JCIS-06)
Series
Advances in Intelligent Systems Research
Publication Date
October 2006
ISBN
978-90-78677-01-7
ISSN
1951-6851
DOI
10.2991/jcis.2006.179How to use a DOI?
Copyright
© 2006, the Authors. Published by Atlantis Press.
Open Access
This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

Cite this article

TY  - CONF
AU  - Tal Shavit
AU  - Shosh Shahrabani
AU  - Uri Benzion
PY  - 2006/10
DA  - 2006/10
TI  - Effect of price quoting on financial assets price
BT  - Proceedings of the 9th Joint International Conference on Information Sciences (JCIS-06)
PB  - Atlantis Press
SP  - 577
EP  - 579
SN  - 1951-6851
UR  - https://doi.org/10.2991/jcis.2006.179
DO  - 10.2991/jcis.2006.179
ID  - Shavit2006/10
ER  -