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Superstition and Financial Decision Making

Management Science, Forthcoming

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

David A. Hirshleifer

University of California, Irvine - Paul Merage School of Business; NBER

Ming Jian

Nanyang Technological University (NTU)

Huai Zhang

Nanyang Technological University (NTU)

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

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

David A. Hirshleifer

University of California, Irvine - Paul Merage School of Business ( email )

Irvine, CA California 92697-3125
United States

HOME PAGE: http://sites.uci.edu/dhirshle/

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ming Jian

Nanyang Technological University (NTU) ( email )

Nanyang Business School
Singapore, 639798
Singapore

Huai Zhang (Contact Author)

Nanyang Technological University (NTU) ( email )

Nanyang Business School
50 Nanyang Ave.
Singapore, 639798
Singapore
+65-6790-4097 (Phone)

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