Compulsive Gambling in the Financial Markets: Evidence from Two Investor Surveys

40 Pages Posted: 16 Aug 2017 Last revised: 28 May 2019

See all articles by Ruben Cox

Ruben Cox

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)

Atcha Kamolsareeratana

Mahidol University, College of Management, Students

Roy Kouwenberg

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Mahidol University - College of Management

Date Written: April 30, 2019

Abstract

This study shows that a group of individual investors in the financial markets displays symptoms of compulsive gambling, or an addiction to trading, based on a standard diagnostic checklist from the American Psychiatric Association. In a representative sample of Dutch retail investors, we find that 4.4% of the investors meet the criteria for compulsive gambling in the financial markets. Another 3.6% meet the criteria for problem gambling, which is a less severe form of gambling disorder. Investors with symptoms of compulsive gambling problems tend to follow a more active and speculative trading style, indicated by a higher frequency of stock trading, day trading and investing in derivatives and leveraged products. In addition, compulsive gamblers tend to have more financial problems and lower socio-economic status than other investors.

Keywords: Individual Investors, Trading Behavior, Gambling

JEL Classification: G11, G02, L83

Suggested Citation

Cox, Ruben and Kamolsareeratana, Atcha and Kouwenberg, Roy R. P., Compulsive Gambling in the Financial Markets: Evidence from Two Investor Surveys (April 30, 2019). Available at SSRN: https://ssrn.com/abstract=3018540 or http://dx.doi.org/10.2139/ssrn.3018540

Ruben Cox

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 (0) 10 4088929 (Phone)

Atcha Kamolsareeratana (Contact Author)

Mahidol University, College of Management, Students ( email )

Salaya
Thailand

Roy R. P. Kouwenberg

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

HOME PAGE: http://people.few.eur.nl/kouwenberg

Mahidol University - College of Management ( email )

69 Vipawadee Rangsit Road
Bangkok, 10400
Thailand

HOME PAGE: http://www.cmmu.mahidol.ac.th/main/faculty/aroy.asp

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