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The lure of illusory luck: How much are people willing to pay for random shocks
Yuan,Jia1; Sun,Guang Zhen2; Siu,Ricardo1
2019-06-19
Source PublicationJournal of Economic Behavior and Organization
ISSN01672681
Volume106Pages:269-280
AbstractWe investigate whether people are influenced to make investment decisions based on random shock signals and to what extent they do so by exploiting a unique data set from a popular Chinese lottery game with over one million observations. We first present evidence that people, as individual investors in the field, not only systematically commit the hot-hand fallacy in chasing the winners who happen to pick the lucky numbers in the latest round of the lottery game, but are also willing to bear a cost in doing so although winning the lottery is merely a random shock. We then propose a simple model to account for the observed market behaviors. We further estimate the lottery players' willingness to pay for the random shock signals, and find that the market value of such illusion is significantly high. © 2014 Elsevier B.V.
KeywordAlphabetic preference Hothand fallacy Market value of random shocks Mutual funds Online peer-to-peer gambling
DOI10.1016/j.jebo.2014.06.003
URLView the original
Language英语
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Cited Times [WOS]:6   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionUniversity of Macau
Affiliation1.Faculty of Business AdministrationUniversity of Macau,Macao
2.Faculty of Social ScienceUniversity of Macau,Macao
First Author AffilicationFaculty of Business Administration
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GB/T 7714
Yuan,Jia,Sun,Guang Zhen,Siu,Ricardo. The lure of illusory luck: How much are people willing to pay for random shocks[J]. Journal of Economic Behavior and Organization,2019,106:269-280.
APA Yuan,Jia,Sun,Guang Zhen,&Siu,Ricardo.(2019).The lure of illusory luck: How much are people willing to pay for random shocks.Journal of Economic Behavior and Organization,106,269-280.
MLA Yuan,Jia,et al."The lure of illusory luck: How much are people willing to pay for random shocks".Journal of Economic Behavior and Organization 106(2019):269-280.
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