The High Holidays: Psychological mechanisms of honesty in real-life financial decisions

Research output: Contribution to journalArticlepeer-review


Research in psychology has established that activation of religious ideas affects individuals’ behavior. We hypothesize that religious and honesty mechanisms activated on the High Holidays, the ten days before Yom Kippur, when people seek repentance, amplify people's anxiety and affect their financial decision-making. We find that returns during the High Holidays are abnormally low; implied volatility, measured by VIX and VXO, as well as realized volatility estimates, are abnormally high; and the abnormal increase in implied volatility overshoots future volatility. Using these results, we devise a simple trading rule that investors may consider to maximize returns during the High-Holidays period.

Original languageEnglish
Pages (from-to)121-137
Number of pages17
JournalJournal of Behavioral and Experimental Economics
StatePublished - Feb 2019

Bibliographical note

Publisher Copyright:
© 2019 Elsevier Inc.


  • Behavior
  • Beliefs
  • Decision-making
  • Honesty
  • Market anomalies
  • Mood
  • Religion
  • VIX
  • Volatility

ASJC Scopus subject areas

  • Applied Psychology
  • Economics and Econometrics
  • General Social Sciences


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