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Superstition and financial decision making

  • Author(s): Hirshleifer, D
  • Jian, M
  • Zhang, H
  • et al.
Abstract

In Chinese culture, certain digits are lucky and others unlucky.We test howsuch numerological superstition affects financial decision in the China initial public offering (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.

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