ABSTRACT We examine the role of prime numbers in conscious selection, the mental process by which players select numbers non‐randomly on a lotto ticket. Using three estimators of the popularity of numbers, we show that the tendency to overselect prime numbers significantly reduces individual gains. We use 10 years of public data from the Belgian National Lottery to demonstrate our main result and to test the robustness of our findings against several confounding factors such as the tendency to play birthday dates and the preference for “lucky” numbers. Evidence from two independent survey data sets corroborates our main finding.

This paper examines how cognitive abilities explain variation in financial literacy among teenagers. We consider three dimensions of cognition: cognitive reflection, fluid intelligence, and approximate numeracy. Together, these measures account for nearly half of the variance in financial literacy scores and help explain the observed gender gap. While we find that the gender gap in financial literacy is entirely accounted for by differences in cognitive reflection, we do not find a similar result for approximate numeracy or fluid intelligence. These findings suggest that the gap is not driven by general cognitive differences across gender but by specific features that are shared by the Cognitive Reflection Test (CRT) and the financial literacy test and that disproportionately penalize girls.

Purpose This study aims to develop a peer financial modelling scale to ascertain any correlations between the role modelling of peers and the financial literacy of adolescents. The theoretical foundation for this aim lies in Social Learning Theory. This study also examines the reliability of the recently developed short and minimal versions of the Parent Financial Socialisation Scale. Design/methodology/approach Using a survey administered through Qualtrics, data were collected from a sample of 382 15- to 19-year-olds. Confirmatory factor analysis was used to measure model fit of any proposed scale, with Cronbach’s alpha calculated to assess for internal consistency reliability. An ordinary least squares regression was then run to assess any correlation between the scale developed and financial literacy, incorporating control variables for gender and socioeconomic status. Findings A Peer Financial Modelling Scale is developed and found to be negatively correlated with financial literacy levels. Adolescents with lower financial literacy are more likely to view their peers as good financial role models. All three versions of the Parent Financial Socialisation Scale were found to be positively correlated with financial literacy knowledge. Research limitations/implications Limitations include the lack of a general cognitive ability measure and personality measure in the ordinary least squares regressions. Practical implications A previously undiscovered advantage of higher financial literacy levels among adolescents is a lower likelihood to see peers as appropriate financial role models. Originality/value To the best of the authors’ knowledge, this study is the first to develop a scale to capture the socialising effect of peers in the context of financial literacy.

Lotto players often choose numbers non-randomly, a behavior known as conscious selection. In many Western countries, the number 7 is considered lucky, causing it to be disproportionately selected in lotto games. This study quantifies the financial cost of this tendency using data from lotto games in Belgium (2011-2025) and France (2002-2008, 2019-2025), as well as Euromillions data (2016-2025). Due to the parimutuel payout system, tickets containing the number 7 earn significantly lower prizes than those without it. We find that this cost persists across different game formats and time periods.

Do more intelligent investors take better economic decisions than less intelligent ones? Is risk attitude, in particular risk/loss aversion, linked to cognitive ability? Does an investor's cognitive ability impact his/her patience? Is financial performance positively linked to investor's intelligence? These research questions have become highly relevant with the development of behavioral economics and behavioral finance, following the recognition that humans are not homo economicus. This paper reviews the several strands of literature devoted to answering the above questions. We first discuss the barely debated definitions and measures of intelligence/cognitive ability used in psychology, economics, and finance. We then review the results related to the (controversial) link between risk aversion and cognitive ability. We observe that the literature provides clear results for patience; individuals with a higher level of cognitive ability being more patient on average. Finally, we review the contributions linking (successfully or not) portfolio choice and financial performance to cognitive ability.

Cognitive style (reflective vs. intuitive) as measured with cognitive reflection tests (CRTs) is an important driver of financial decision-making and the rationality of individual behavior. Prior studies explain CRT score differences by gender, stipulating that women are more intuitive and less reflective than men. Recent work, however, raises doubts about such gender differences, suggesting that CRT score differences stem from gender-related role and personality instead. Accordingly, using survey data from 504 Belgian respondents, we examine which of these two individual difference factors better explains CRT scores. The results indicate that, on average, women indeed have a lower reflective cognitive style and a higher intuitive cognitive style. However, this effect is not only explained by gender per se, but also by self-perceived gender role and personality, that is, perceived masculinity. Indeed, perceived masculinity moderates the effect of gender, so that masculine females have higher reflective and lower intuitive CRT scores.

Empirical evidence suggests that stock price magnitude influences portfolio choices and returns, challenging standard finance theory. Prior studies often attribute this to stock characteristics like variance or skewness. In this paper, we isolate price magnitude's impact through experimental markets, neutralizing asset characteristics. Results reveal that subjects process "small" and "large" prices differently, with small-price markets experiencing more mispricing. Our findings cannot be explained by stock traits like lottery features or skewness, indicating that price magnitude directly affects perceptions of future returns. This aligns with neuropsychology evidence on mental scales for small and large numbers and supports empirical findings in finance, despite conflicting with traditional theory.

The literature on lottery gambling shows that players do not select numbers randomly, a phenomenon which is called conscious selection. Mainly, players prefer "small" numbers (less than thirty), either because of the existence of small lucky numbers or because they are victims of the so-called birthday-number effect. Because lotto games are parimutuel, such preferences result in poor ticket choices in terms of achieving below average returns. Using data from Belgium, where approximately 10% of the population plays lotto games every week, this paper extends prior literature by documenting the existence of a gender gap in the birthday-number effect, with women displaying a stronger birthday-number effect than men, as well as the non-persistence of the birthday-number effect (and consecutively of the gender gap) when participants are asked to fill in a second lotto ticket immediately after their first one. The disappearance of the birthday-number effect in sequential choices appears to be driven by response speed, with participants being twice as fast to fill in the second ticket compared to the first one. Moreover, we find that participants who bet on their birthday numbers take significantly more time to complete their ticket. Contrary to prior research, we find that the strength of the birthday-number effect is positively related to deliberative number choices, not intuitive and automatic number choices. Our results are robust to controlling for potential confounding effects including those related to participants' age, education, self-esteem, and superstitious beliefs.

Conscious selection is the mental process by which lottery players select numbers nonrandomly. In this paper, we show that the number 19, which has been heard, read, seen, and googled countless times since March 2020, has become significantly less popular among Belgian lottery players after the World Health Organization named the disease caused by the coronavirus SARS-CoV-2 "COVID-19". We argue that the reduced popularity of the number 19 is due to its negative association with the COVID-19 pandemic. Our study triangulates evidence from field data from the Belgian National Lottery and survey data from a nationally representative sample of 500 Belgian individuals. The field data indicate that the number 19 has been played significantly less frequently since March 2020. However, a potential limitation of the field data is that an unknown proportion of players selects numbers randomly through the "Quick Pick" computer system. The survey data do not suffer from this limitation and reinforce our previous findings by showing that priming an increase in the salience of COVID-19 prior to the players' selection of lottery numbers reduces their preference for the number 19. The effect of priming is concentrated amongst those with high superstitious beliefs, further supporting our explanation for the reduced popularity of the number 19 during the COVID-19 pandemic.

We show that the acuity of the Approximate Number System (ANS), a cognitive system that allows humans and many animal species to evaluate quantities without using exact calculations, is a strong predictor of subjects' earnings in experimental markets. We measure ANS acuity with a bounded number line estimation (NLE) task and find that subjects who perform better on the NLE task, obtain higher earnings in a continuous double auction experimental market. We underline two channels through which high ANS acuity subjects achieve better performance: they are rewarded for offering liquidity and are faster at exploiting trading opportunities. We also show that, in a given market, the distribution of NLE scores influences mispricing. Our results are unchanged when we control for differences in trading intensity, risk aversion, background education or demographic characteristics.

Unprecedented uncertainty during the Covid-19 pandemic stimulated anxiety among individuals, while the associated health restrictions contributed to a feeling of loss of control. Prior research suggests that, in times of crisis, some individuals rely on superstitious beliefs as a coping mechanism, but it remains unclear whether superstition is positively or negatively associated with fear of Covid-19 during the pandemic, and the role that individuals' locus of control plays in this regard. In two studies conducted among individuals in Belgium and the U.S., we therefore examined the relationship between superstitious beliefs, locus of control, and feeling at risk of Covid-19. Across both countries, we found that superstition is positively, and internal locus of control negatively, related with feeling at risk of Covid-19. Moreover, in Belgium, the effect of superstition was less pronounced for individuals with a higher level of internal locus of control. The absence of an interaction effect between superstition and locus of control in the U.S. could be explained by this country's higher level of superstitious beliefs and lower level of internal locus of control combined with a stronger feeling of being at risk of Covid-19 or cultural differences such as Belgium's higher uncertainty avoidance compared to the U.S.

Do more intelligent investors take better economic decisions than less intelligent ones? Is risk attitude, in particular risk/loss aversion, linked to cognitive ability? Does an investor’s cognitive ability impact his/her patience? Is financial performance positively linked to investor’s intelligence? These research questions have become highly relevant with the development of behavioral economics and behavioral finance, following the recognition that humans are not homo economicus. This paper reviews the literature devoted to answering the above questions. We first discuss the barely debated definitions and measures of intelligence/cognitive ability used in psychology, economics and finance. We then review the results related to the (controversial) link between risk aversion and cognitive ability. We show that the literature provides unambiguous results for patience; individuals with a higher level of cognitive ability being more patient on average. Finally, we review the contributions linking (successfully or not) portfolio choice and financial performance to cognitive ability.

Recent empirical research in accounting and finance shows that the magnitude of stock prices influences analysts' price forecasts (Roger, Roger et Schatt [2018]). In this paper, we report the results of a novel experiment where some subjects are asked to forecast future prices in a continuous double auction market. In this experiment, two successive markets take place: one where the fundamental value is a small price and one where the fundamental value is a large price. Although market prices are higher (compared to fundamental value) in small price markets than in large price markets, our results indicate that analyst subjects' forecasts are more optimistic in small price markets compared to large price markets. Analyst subjects strongly anchor on past price trends when building their price forecasts and do not mitigate subject traders' bias. Overall, our experimental findings support the existence of a small price bias deeply rooted in the human brain.

Using a large set of both trading and survey data, we sketch the profile of the typical retail investor who trades Leveraged Exchange-Traded Products (LETPs). Our findings show that the typical user of LETPs looks like an overconfident gambler willing to take a high risk, though some highly loss averse investors use inverse leveraged Exchange-Traded Products (ILETPs) for hedging purposes. Aggregating holdings in both stocks and Exchange-Traded Products (ETPs), users of LETPs get a lower performance than retail investors who invest in vanilla ETPs (VETPs). The reason is twofold: they trade too much and hurt their returns when investing in LETPs. Though trading LETPs could be interpreted as rational gambling, the skewness of the monthly portfolio returns of LETP users does not offset the risk-return sacrifice in the mean-variance space. (c) 2021 Board of Trustees of the University of Illinois. Published by Elsevier Inc. All rights reserved.

In this note, we invite the reader to think about behavioral portfolio choice as a deviation from the standard Markowitz problem. The deviation has three origins; 1) the objective function to be maximized, 2) the probability measure under which prices and returns are characterized, and finally 3) the domain over which the optimization problem is solved. We then provide an illustration, from the Behavioral Portfolio Theory (BPT) of Shefrin and Statman (2000) to a set of relevant portfolio performance measures in a behavioral framework.

La littérature récente en comptabilité et en finance montre que le niveau des cours des actions influence les prévisions de prix des analystes (Roger, Roger et Schatt [2018]). Dans le présent article, nous montrons que ce résultat reste valide dans le cadre contrôlé du laboratoire quand des sujets doivent prévoir les prix futurs sur un marché expérimental auquel ils ne participent pas. Chaque sujet fait des prévisions lors de deux marchés successifs : l’un pour lequel la valeur fondamentale est faible et l’autre pour lequel la valeur fondamentale est élevée. Bien que les prix de marché soient plus élevés (par rapport à la valeur fondamentale) sur les marchés à petits prix du fait du biais de « petit prix » des sujets traders, nos résultats indiquent que les prévisions des analystes sont plus optimistes sur les marchés à petits prix que sur les marchés à prix élevés. Les sujets analystes ancrent leurs prévisions sur les prix de marché passés et n’atténuent pas le biais des sujets traders. Nos résultats montrent ainsi que l’existence de ce biais de « petit prix » reflète l’utilisation par les sujets de deux échelles mentales différentes pour traiter petits et grands nombres. Classification JEL : G14.

Conventional finance models assume that stock price magnitude should not influence portfolio choices or future returns. This view is contradicted, however, by empirical evidence. In this paper, we show that trading prices, in experimental markets, are processed differently by participants depending on their magnitude. Our experiment has two consecutive treatments. One where the fundamental value is a small number (small price market) and one where the fundamental value is a large number (large price market). Small price markets exhibit greater mispricing than large price markets. We obtain this result both between-participants and within-participants. Our findings indicate that price magnitude has a direct impact on how individuals perceive the distribution of future returns. This result is at odds with standard finance theory but is consistent with: (1) evidence in neuropsychology on the use of different mental scales for small and large numbers, and (2) empirical results in the finance and accounting literature.