• Corpus ID: 34090084

Superstition and Financial Decision Making Current draft : August 2012

@inproceedings{Hirshleifer2012SuperstitionAF,
  title={Superstition and Financial Decision Making Current draft : August 2012},
  author={David Hirshleifer and Ming Jian and Huai Zhang},
  year={2012}
}
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 are initially traded at a premium after controlling for known determinants of valuation multiples, the lucky number premium dissipates within… 
sites.uci.edu

Figures and Tables from this paper

References

SHOWING 1-10 OF 49 REFERENCES

DARK OMENS IN THE SKY: DO SUPERSTITIOUS BELIEFS AFFECT INVESTMENT DECISIONS?

Psychological research documents that individuals are more likely to resort to superstitious practices when operating in environments dominated by uncertainty, high stakes, and perceived lack of…

Does Prospect Theory Explain IPO Market Behavior?

We derive a behavioral measure of the IPO decision-maker's satisfaction with the underwriter's performance based on Loughran and Ritter (2002) and assess its ability to explain the decision-maker's…

Hot Markets, Investor Sentiment, and IPO Pricing

Our model of the initial public offering process links the three main empirical IPO ‘anomalies’ – underpricing, hot issue markets, and long-run underperformance – and traces them to a common source…

Speculation Duopoly with Agreement to Disagree: Can Overconfidence Survive the Market Test?

In a duopoly model of informed speculation, the authors show that overconfidence may strictly dominate rationality since an overconfident trader may not only generate higher expected profit and…

The New Issues Puzzle

Companies issuing stock during 1970 to 1990, whether an initial public offering or a seasoned equity offering, have been poor long-run investments for investors. During the five years after the…

The Long-Run Performance of Initial Public Offerings

The underpricing of initial public offerings that has been widely documented appears to be a short-run phenomenon. Issuing firms during 1975-84 substantially underperformed a sample of matching firms…

China share issue privatization: the extent of its success

Investor attention , overconfidence and category learning

Motivated by psychological evidence that attention is a scarce cognitive resource, we model investors’ attention allocation in learning and study the effects of this on asset-price dynamics. We show…

The effect of superstitious beliefs on performance expectations

We explore superstitious beliefs as a basis of product performance expectations and their impact on initial purchase likelihood and subsequent satisfaction. In doing so, we demonstrate instances when…

Are Accruals during Initial Public Offerings Opportunistic?

We find evidence that initial public offering (IPO) firms, on average, have high positive issue-year earnings and abnormal accruals, followed by poor long-run earnings and negative abnormal accruals.…