DOSPERT's Gambling Risk-Taking Propensity Scale Predicts Excessive Stock Trading

Journal of Behavioral Finance, 14:1, 65-78, 2013

Columbia Business School Research Paper No. 13-50

Posted: 10 Jul 2013  

Lukasz Markiewicz

Kozminski University

Elke U. Weber

Columbia Business School - Management & Psychology

Date Written: February 27, 2013

Abstract

Using a data set that combines trading records in a financial investment simulation with survey responses, this study provides evidence that a domain-specific variant of risk-taking propensity, namely risk taking in gambling (but not in investing) situations, predicts the volume of trades of financial investors. We find that investors’ gambling risk-taking propensity, measured by the Weber, Blais, and Betz (2002), Domain-Specific-Risk-Taking (DOSPERT) gambling subscale, increases the number of trades made and hence transaction costs, as well as the extent of their day trading. The short (four-item) gambling risk-taking propensity DOSPERT subscale thus provides a useful diagnostic addition to risk attitude assessment instruments for private investors.

Keywords: Domain-specific risk taking, DOSPERT scale, risk attitude, trading volume, day trading

Suggested Citation

Markiewicz, Lukasz and Weber, Elke U., DOSPERT's Gambling Risk-Taking Propensity Scale Predicts Excessive Stock Trading (February 27, 2013). Journal of Behavioral Finance, 14:1, 65-78, 2013; Columbia Business School Research Paper No. 13-50. Available at SSRN: https://ssrn.com/abstract=2291014

Lukasz Markiewicz

Kozminski University ( email )

ul. JagielloDska 57/59
Warsaw, 03-303
Poland

Elke U. Weber (Contact Author)

Columbia Business School - Management & Psychology ( email )

3022 Broadway
New York, NY 10027
United States

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