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Empirically, we show that the compounded effects of money and nominal price illusions are stronger for low-priced stocks during periods of high inflation and economic downturns and for stocks with low institutional ownership. Our findings are robust when controlling for valuation uncertainties of low-priced stocks, including idiosyncratic volatility and firm age. <\/jats:p><jats:p> This paper was accepted by Agostino Capponi, finance. <\/jats:p><jats:p> Supplemental Material: The online appendix and data files are available at https:\/\/doi.org\/10.1287\/mnsc.2023.03549 . <\/jats:p>","DOI":"10.1287\/mnsc.2023.03549","type":"journal-article","created":{"date-parts":[[2024,9,27]],"date-time":"2024-09-27T17:43:07Z","timestamp":1727458987000},"page":"5204-5229","source":"Crossref","is-referenced-by-count":0,"title":["Compounding Money and Nominal Price Illusions"],"prefix":"10.1287","volume":"71","author":[{"ORCID":"https:\/\/orcid.org\/0000-0002-8598-4269","authenticated-orcid":false,"given":"Mustafa O.","family":"Caglayan","sequence":"first","affiliation":[{"name":"College of Business, Florida International University, Miami, Florida 33199"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-0984-6833","authenticated-orcid":false,"given":"Diogo","family":"Duarte","sequence":"additional","affiliation":[{"name":"College of Business, Florida International University, Miami, Florida 33199"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-9446-9349","authenticated-orcid":false,"given":"Victor F.","family":"Duarte","sequence":"additional","affiliation":[{"name":"Gies College of Business, University of Illinois Urbana-Champaign, Champaign, Illinois 61820"}]},{"ORCID":"https:\/\/orcid.org\/0000-0002-0348-9468","authenticated-orcid":false,"given":"Xiaomeng","family":"Lu","sequence":"additional","affiliation":[{"name":"College of Business and Technology, Georgia College & State University, Milledgeville, Georgia 31061"}]}],"member":"109","reference":[{"key":"B1","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2016.05.012"},{"key":"B2","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2019.3328"},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.2017.2904"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.1111\/j.1540-6261.2006.00836.x"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2007.12.005"},{"key":"B7","doi-asserted-by":"publisher","DOI":"10.2469\/faj.v56.n2.2347"},{"key":"B8","doi-asserted-by":"publisher","DOI":"10.3905\/jpm.2003.319916"},{"key":"B9","doi-asserted-by":"publisher","DOI":"10.1111\/jofi.12618"},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.1111\/jofi.13098"},{"issue":"9","key":"B12","first-page":"5949","volume":"70","author":"Atmaz A","year":"2023","journal-title":"Management Sci."},{"key":"B13","doi-asserted-by":"publisher","DOI":"10.1111\/j.1540-6261.2009.01511.x"},{"key":"B14","doi-asserted-by":"publisher","DOI":"10.1257\/aer.98.5.2066"},{"key":"B15","doi-asserted-by":"publisher","DOI":"10.1016\/j.jfineco.2014.08.007"},{"key":"B16","doi-asserted-by":"publisher","DOI":"10.1111\/1467-9965.00061"},{"key":"B17","doi-asserted-by":"publisher","DOI":"10.1111\/j.1467-937X.2009.00596.x"},{"journal-title":"Rev. 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