Does ticker fluency matter?
Abstract
Purpose
The purpose of this paper is to investigate whether investors prefer stocks with more linguistically fluent tickers (MAK, SOM) to those with less linguistically fluent tickers (WQH, JZU) in an experimental setting.
Design/methodology/approach
The author conducts an experiment in which a choice of two hypothetical investments with linguistically fluent and non-fluent tickers is presented to survey participants, who are asked to choose the preferred investment (or indicate that they are indifferent between the investments).
Findings
Consistent with investor rationality, survey results indicate that, for both riskless and risky investments, individuals do not exhibit differential preferences for stocks with pronounceable vs unpronounceable tickers. Additionally, individuals are not willing to pay more for former vs latter stocks.
Originality/value
A potential implication is that corporate boards should not attribute high importance to ticker fluency.
Keywords
Acknowledgements
The author would like to thank Andrin Bögli, Michael Cooper, Gur Huberman, Russell Jame, Raghavendra Rau, and attendees of the 2016 MFA annual meeting for helpful comments. The author also like to thank Saiqa Khaskhali for her research assistance. All errors are of the author.
Citation
Peterburgsky, S. (2017), "Does ticker fluency matter?", Review of Behavioral Finance, Vol. 9 No. 3, pp. 262-277. https://doi.org/10.1108/RBF-06-2016-0035
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited