Why Susie owns Starbucks: The name letter effect in security selection
We examine whether security selection is influenced by the name letter effect--a psychological predisposition to select items that start with leading own name letters. Two sets of tests reveal evidence that the name letter effect influences investors' security selection decisions. First, breadth of ownership (as measured by the number of institutional investors holding the security) is positively related to U.S. name letter frequency, e.g., stocks that begin with the common name letter "M" exhibit a greater number of institutional shareholders than stocks that begin with the less common name letter "X." Second, undergraduate students managing university endowment funds are more likely to select securities for evaluation when the stock's name begins with the same letter as their name.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- C. Miguel Brendl & Amitava Chattopadhyay & Brett W. Pelham & Mauricio Carvallo, 2005. "Name Letter Branding: Valence Transfers When Product Specific Needs Are Active," Journal of Consumer Research, Oxford University Press, vol. 32(3), pages 405-415, December.
- Spangenberg, Eric R. & Grohmann, Bianca & Sprott, David E., 2005. "It's beginning to smell (and sound) a lot like Christmas: the interactive effects of ambient scent and music in a retail setting," Journal of Business Research, Elsevier, vol. 58(11), pages 1583-1589, November.
- Michael J. Cooper, 2001. "A Rose.com by Any Other Name," Journal of Finance, American Finance Association, vol. 56(6), pages 2371-2388, December.
- Huberman, Gur, 2001. "Familiarity Breeds Investment," Review of Financial Studies, Society for Financial Studies, vol. 14(3), pages 659-680.
- Buck, Ross & Anderson, Erika & Chaudhuri, Arjun & Ray, Ipshita, 2004. "Emotion and reason in persuasion: Applying the ARI model and the CASC Scale," Journal of Business Research, Elsevier, vol. 57(6), pages 647-656, June.
- Babin, Barry J. & Babin, Laurie, 2001. "Seeking something different? A model of schema typicality, consumer affect, purchase intentions and perceived shopping value," Journal of Business Research, Elsevier, vol. 54(2), pages 89-96, November.
- Brad M. Barber & Terrance Odean, 2008. "All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors," Review of Financial Studies, Society for Financial Studies, vol. 21(2), pages 785-818, April.
- Gustavo Grullon, 2004. "Advertising, Breadth of Ownership, and Liquidity," Review of Financial Studies, Society for Financial Studies, vol. 17(2), pages 439-461.
- Merton, Robert C, 1987.
" A Simple Model of Capital Market Equilibrium with Incomplete Information,"
Journal of Finance,
American Finance Association, vol. 42(3), pages 483-510, July.
- Merton, Robert C., 1987. "A simple model of capital market equilibrium with incomplete information," Working papers 1869-87., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- McDonald, William J., 1998. "Consumer Decision Making and Altered States of Consciousness: A Study of Dualities," Journal of Business Research, Elsevier, vol. 42(3), pages 287-294, July.
- Puccinelli, Nancy M. & Deshpande, Rohit & Isen, Alice M., 2007. "Should I stay or should I go? Mood congruity, self-monitoring and retail context preference," Journal of Business Research, Elsevier, vol. 60(6), pages 640-648, June.
- Krabuanrat, K. & Phelps, R., 1998. "Heuristics and rationality in strategic decision making: An exploratory study," Journal of Business Research, Elsevier, vol. 41(1), pages 83-93, January. Full references (including those not matched with items on IDEAS)