Crossing of Psychological Price Levels: The Price Dynamics and Interaction between S&amp;P500 Index and Index Futures

Tsao, Chueh-Yung; Lee, Chun I.; Shyu, Yih-Wen

doi:10.1080/15427560.2017.1344675

Cited by 3 publications

(2 citation statements)

References 34 publications

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“…Park (2010) suggest that investors regard moving average prices as their reference points, even though the fundamental price follows a random walk process. In the absence of publicly available information, much literature refers to the 52‐week high/low as a reference point for shares (Baker et al, 2012; Tsao et al, 2017). Shares closer to their 52‐week high (52‐week low) have negative (positive) returns in the days that follow a large negative (positive) price shock (Brady & Premti, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Buy and buy again: The impact of unique reference points on (re)purchase decisions

Willows

Richards

2022

Int Rev Finance

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Behavioral finance has uncovered that investor engage emotionally when trading. We investigate how three psychological factors influence purchase and repurchase decisions: representativeness, the influence of prior gains, and reference points. Using trading data of 7200 UK investors we find that purchase decisions are influenced by representative heuristic and repurchase decisions are influenced by both representative heuristic and prior profitability. Further survival analysis showed that investors use the prior selling price as a unique reference point. Investors are more likely to repurchase a stock when trading above its reference point, but more likely to initiate the repurchase when trading below. Investors are influenced by previous experience and engage learning behavior when they seek to reinforce past success. As reference points are inferred but infrequently researched, this research adds to the literature and provides important and robust results for those engaging with financial planning clients.

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Section: Literature Reviewmentioning

confidence: 99%

Buy and buy again: The impact of unique reference points on (re)purchase decisions

Willows

Richards

2022

Int Rev Finance

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“…Since China joined the World Trade Organization (WTO) in 2001, Chinese companies have not only faced competition from the domestic market but also participated in the fierce competition in the international market (Tsao et al, 2017). Increased globalization and reduced trade barriers have intensified the competition in product markets.…”

Section: Introductionmentioning

confidence: 99%

The Impact of Customer Psychological Price on Audit Pricing in the Start-Up Company Market

Ding¹

2020

Front. Psychol.

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Start-up companies are confronted with various risks and many uncertainties, and professional auditing can fully analyze start-up companies. In this way, both parties may maximize their interests through auditing the market activities. Based on the characteristics of start-up companies, this study explores the impact of customer psychological prices on audit pricing. The impact of customer psychological prices on audit pricing decisions was systematically analyzed from various angles, thereby determining whether it will affect the development of the product market. The results show that product market dominance reduces the agency costs between the owner and manager of the customer company. In other words, if the customers have greater control over the product market, they will have a lower business risk, and the auditor risk will be reduced accordingly, hence a lower audit fee. In the start-up company market, even if the financing dilemma restricts the survival and development of the company, customers still have psychological expectations for audit pricing. When their psychological price of products is different from the market price of products, it may affect the market advantage of products with lower audit fees, and further expands the previous research. In the market, customers also have certain psychological expectations for "auditing" products. Therefore, strengthening the relationship between auditors' pricing and customers' psychological prices has a positive effect on enhancing the competitiveness of product markets, which also increases the operating efficiency of start-up companies.

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How Do Investors Determine Stock Prices after Large Price Shocks?

Brady

Premti

2018

Journal of Behavioral Finance

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Crossing of Psychological Price Levels: The Price Dynamics and Interaction between S&P500 Index and Index Futures

Cited by 3 publications

References 34 publications

Buy and buy again: The impact of unique reference points on (re)purchase decisions

Buy and buy again: The impact of unique reference points on (re)purchase decisions

The Impact of Customer Psychological Price on Audit Pricing in the Start-Up Company Market

How Do Investors Determine Stock Prices after Large Price Shocks?

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