Lottery Jackpots and the Monday Effect

UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance

Topic: Lottery Jackpots and the Monday Effect

Speaker: Chuan Yang Hwang, Nanyang Technological University

Abstract: Using large lottery jackpots on Saturday as repeated exogenous shocks to investor attention, we find that the Monday effect of market return and the Monday effect of anomalies (abnormally low returns of speculative stocks concentrates on Monday) only exist on Mondays with a large jackpot on the preceding Saturday. For example, the Monday effect of high idiosyncratic volatility stocks is a striking - 64 bps when there was a large Saturday jackpot but is negligible otherwise. This is consistent with the hypothesis that individual investors allocate the weekends to process information and decide on trading strategies. Large jackpots during the weekends distract individual investors’ attention from the stock market, resulting in less buying relative to selling, lower return and larger stock co-movement on the following Monday, suggesting investor inattention plays an important role in prominent anomalies in the literature. Furthermore, we do not find similar jackpot effect on weekday drawings.

Moderator: Lorenzo Casavecchia, University of Technology Sydney

Date: Wednesday, 24th June 2020
Time: 12.00 – 1.00 p.m. (Australian Eastern Standard Time)
Venue: This is on online Zoom webinar.

Seminar protocols:

  • The webinar will run for 45 minutes, followed by a 15 minute Q&A session.
  • There will be a moderator for each seminar event, who will facilitate communication and resolve any technical issues.
  • Participants can use the Q&A facility to ask questions during the presentation. The moderator will then alert the speaker and ask the questions raised.

Co-ordinator: Harry Scheule

Enquiries: Duncan Ford

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UTS acknowledges the Gadigal people of the Eora Nation, the Boorooberongal people of the Dharug Nation, the Bidiagal people and the Gamaygal people, upon whose ancestral lands our university stands. We would also like to pay respect to the Elders both past and present, acknowledging them as the traditional custodians of knowledge for these lands.