Superstition and Financial Decision Making

Hirshleifer, David A.; Jian, Ming; Zhang, Huai

doi:10.2139/ssrn.1460522

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Superstition and Financial Decision Making

Management Science, Forthcoming

44 Pages Posted: 8 Aug 2012 Last revised: 25 Feb 2017

See all articles by David A. Hirshleifer

David A. Hirshleifer

Marshall School of Business, USC; National Bureau of Economic Research (NBER)

Huai Zhang

Nanyang Business School, Nanyang Technological University

Date Written: April 12, 2016

Abstract

In Chinese culture, certain digits are lucky and others unlucky. We test how such numerological superstition affects financial decision in the China IPO market. We find that the frequency of lucky numerical stock listing codes exceeds what would be expected by chance. Also consistent with superstition effects, newly listed firms with lucky listing codes experience inferior post-IPO abnormal returns. Further tests suggest that our conclusions are not driven by endogeneity.

Keywords: superstition, financial decision, IPO

JEL Classification: G12, G14, G15

Suggested Citation: Suggested Citation

Hirshleifer, David A. and Jian, Ming and Zhang, Huai, Superstition and Financial Decision Making (April 12, 2016). Management Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1460522 or http://dx.doi.org/10.2139/ssrn.1460522