The Impacts of Superstition on Risk Preference and Belief Evidence from the Chinese Zodiac Year

Superstition has a wide range of impacts on economic decisions such as investment, career choice and insurance purchase. Taking the Chinese zodiac year as an example, we apply experimental methods to study two important channels through which superstition affects subjects’ economic decisions. Based on both cross- and within-subject analyses, we find that (1) the zodiac year superstition directly alters risk preference and (2) it also leads to excess pessimism in decision-making. Moreover, we illustrate the potential roles of the zodiac year superstition in real-world businesses via two case studies.