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Lucky lots and unlucky investors

Tao Chen (), Andreas Karathanasopoulos (), Stanley Iat-Meng Ko () and Chia Chun Lo ()
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Andreas Karathanasopoulos: University of Dubai
Chia Chun Lo: Prince Mohammad Bin Salman College (MBSC)

Review of Quantitative Finance and Accounting, 2020, vol. 54, issue 2, No 12, 735-751

Abstract: Abstract The number 8 is considered lucky under the Chinese culture. This paper tries to examine whether investors hold such superstitious belief in the Hong Kong Stock Exchange. Using the transaction level data, we first show that more intense net buying occurs at 8-ending lots. Next, we seek favorable evidence in support of financial complexity hypothesis and informed trading hypothesis, both of which are effective in expounding the prevalence of this biased trading behavior. Finally, we find that traders’ learning by means of information acquisition is able to alleviate the lucky-8 effect on superstitious traders.

Keywords: Lot sizes; Lucky numbers; Trading biases; Learning effects (search for similar items in EconPapers)
JEL-codes: G12 G40 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s11156-019-00805-8

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