In recent years, financial markets have been plagued by frequent scandals such as insider trading, foreign exchange manipulation, and fraud. This harsh reality has compelled the financial industry across various countries to introduce oaths to strengthen the trust responsibility and self-discipline of financial professionals. Research has shown that moral oaths can effectively curb unethical behavior among financial professionals. The underlying mechanism is that oaths can enhance self-control by serving as a special form of promise. Self-control is a generalizable ability across various domains that has a spillover effect. Therefore, can moral oaths in the financial field reduce irrational behavior through the spillover effect of self-control? What are the conditions for its effectiveness? Can a more effective oath be designed to reduce irrationality among individual investors? These are the central issues addressed in this paper.

Focusing on the disposition effect, this paper examines the impact of moral oaths on irrational behavior and its mechanism in the financial field through laboratory experiments. The results show that moral oaths can reduce the disposition effect by enhancing self-control. For an oath to work, it must be public and involve symbolic actions; oaths that only include a signature do not reduce the disposition effect. Furthermore, the study designs an oath aimed at overcoming investment irrationality. It is found that, when the content of the oath aligns with the target behavior, an oath that only includes a signature can enhance self-control and reduce the disposition effect.

The marginal contributions of this paper are as follows: First, it reveals the positive role of oaths in reducing investors’ irrational behavior for the first time, providing valuable insights for interventions targeting the disposition effect. Second, it clarifies the conditions under which oaths affect individual behavior, and highlights the necessity of a public nature and symbolic actions for moral oaths to reduce the disposition effect, expanding and deepening existing research on oaths. Third, it tests the mediating role of self-control and deepens the understanding of the cognitive processing involved in reducing the disposition effect through oaths, clarifying the underlying mechanism by which oaths reduce the disposition effect.