We provide axiomatic foundations for a simple model of play in the prisoners’ dilemma. The model accommodates cooperation and suggests that players behave as if their expectations about their opponents’ behavior vary with their own choice. We refer to this nonstandard updating as magical...

Recent literature in empirical finance is surveyed in its relation to underlying behavioral principles, principles which come primarily from psychology, sociology, and anthropology. The behavioral principles discussed are: prospect theory, regret and cognitive dissonance, anchoring, mental...

Nearly half the currency notes in circulation in Nigeria today has lost its wholeness to one form of mutilation or another due to superstitious beliefs. Statistics have shown that 98.0% of the disfigurement of the naira is (deliberately) caused by superstitious belief, while only 0.2% is due to...

Magical thinking refers to irrational peculiar beliefs, including those that conform to the laws of contagion. We propose that touching an object that was previously touched by a high performer increases confidence via magical thinking (ability contagion) and improves actual performance among...

When a threat looms large in people's minds, they may seek protective measures that could mitigate the negative outcomes associated with this threat. Paradoxically, the possession of such protective measures may, in turn, inspire a sense of safety and reduce the perceived probability of the very...

Purpose – The purpose of this paper is to advance the understanding of antecedents and consequences of superstitious beliefs. Design/methodology/approach – From survey data drawn from 206 South Korean and 218 US respondents, structural equation modeling is used to test the posited...