Reading the Financial Stars: The Interplay of Chinese Fortune‐Telling, Western Astrology, and Investment Decisions

ABSTRACT This paper explores the influence of traditional Chinese fortune‐telling and Western Astrology on investor decision‐making, specifically emphasising the indirect paths of investment through intermediaries such as entrepreneurs or fund managers. We scrutinise how fortune‐telling techniques, which purport to predict the fortunes of these intermediaries, shape investment decisions. Conducting two preregistered studies, we uncover the nuanced mechanisms that govern these indirect relationships. Study 1 demonstrates that venture capitalists' decisions are markedly influenced by both Chinese and Western fortune‐telling reports predicting the fortunes of their intermediaries, such as entrepreneurs or fund managers, whereas Study 2 reveals that individual investors in China respond only to Chinese fortune‐telling techniques that forecast the fortunes of their intermediaries, such as fund managers. Importantly, this divergence is not due to differences in awareness, as all participants underwent training and assessment in these techniques. We further discover that higher financial literacy levels temper the sway of fortune‐telling. Our findings highlight the paramount role of recognising not only the direct influences on investment but, more critically, the indirect pathways mediated by cultural and seemingly irrational factors. This comprehensive understanding contributes to the crafting of investment strategies and policies that navigate the multifaceted labyrinth of cultural influences, cognitive biases, and the layered intricacies of the financial system.