Belief of nonexistent inherent relationship and its impact on decisions

Abstract

The effects of superstitious beliefs in economics have attracted both of psychologists and economists over decades. To date, most studies focus on those beliefs with certain superstitious (religious, mystic, etc.) background stories (sometimes just brief sayings). However, superstitious beliefs without background stories may also exist and affect people’s decisions consequently. These beliefs are often performed as beliefs in a nonexistent inherent relationship. In this research, we introduced a model, based on people’s adjustment in expected utility upon receiving new information, to mathematize the effect of beliefs in nonexistent inherent relationships. This new model reviews such phenomenon in an economical and mathematical view, which could be applied to some unexplained irrational decisions.