Investors and Choice Overload: Evidence from IPOs

34 Pages Posted: 18 Aug 2017

See all articles by Ansley Chua

Ansley Chua

Kansas State University

Jared DeLisle

Utah State University

Tareque Nasser

Kansas State University

Date Written: August 18, 2017

Abstract

This paper provides evidence consistent with retail investors experiencing choice overload when presented with an increasing number of IPOs to choose from. We find that both the average first day return and trading volume are lower in weeks with higher number of IPOs. However, with more IPOs, average return during the week following the first day of trading is higher. These findings suggest that proliferation of choices either debilitates or delays investor participation due to cognitive limitations.

Keywords: IPO, Behavioral Finance

Suggested Citation

Chua, Ansley and DeLisle, Jared and Nasser, Tareque, Investors and Choice Overload: Evidence from IPOs (August 18, 2017). Available at SSRN: https://ssrn.com/abstract=3022258 or http://dx.doi.org/10.2139/ssrn.3022258

Ansley Chua (Contact Author)

Kansas State University ( email )

Manhattan, KS 66506-4001
United States

Jared DeLisle

Utah State University ( email )

Logan, UT 84322
United States
435-797-0885 (Phone)

Tareque Nasser

Kansas State University ( email )

Department of Finance
2097 BB, 1301 Lovers Lane
Manhattan, KS 66506
United States
(785) 532-4375 (Phone)
(785) 532-6822 (Fax)

HOME PAGE: http://https://cba.k-state.edu/faculty-staff/directory/Nasser-Tareque.html

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
47
Abstract Views
307
PlumX Metrics