IDEAS home Printed from https://ideas.repec.org/a/taf/hbhfxx/v21y2020i1p14-26.html
   My bibliography  Save this article

Heaping on Dividends: The Role of Dividend Size and Information Uncertainty

Author

Listed:
  • Keith Jakob
  • Yoonsoo Nam

Abstract

The authors examine whether a cognitive bias influences dividend policy. They find that managers use a heaping heuristic when choosing the amount of their firm’s dividend. Heaping is a human error or bias to round numbers even though precise values are desired. This bias leads to dividend distributions clustered at specific amounts. Dividend size and the level of information uncertainty faced by management help explain the likelihood of heaping. The authors also observe that heaped dividends are “sticky” and altered less frequently, and when there is a dividend change, heaped dividends are more often switched to another heaped amount.

Suggested Citation

  • Keith Jakob & Yoonsoo Nam, 2020. "Heaping on Dividends: The Role of Dividend Size and Information Uncertainty," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 21(1), pages 14-26, January.
    • Handle: RePEc:taf:hbhfxx:v:21:y:2020:i:1:p:14-26
    DOI: 10.1080/15427560.2019.1587763
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/15427560.2019.1587763
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/15427560.2019.1587763?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aineas Kostas Mallios, 2023. "Manipulation in reported dividends: Empirical evidence from US banks," Economics Bulletin, AccessEcon, vol. 43(1), pages 441-461.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:hbhfxx:v:21:y:2020:i:1:p:14-26. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/hbhf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.