Journal of Behavioral Finance, 14:1, 65-78, 2013
Posted: 10 Jul 2013
Date Written: February 27, 2013
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: 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