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.
Original language | English |
---|---|
Article number | 105709 |
Journal | Journal of Banking and Finance |
Volume | 111 |
DOIs | |
Publication status | Published - Feb 2020 |
Bibliographical note
Funding Information:We thank Daniel Dorn, Kim Peijnenburg and seminar participants at Bank of Thailand, Erasmus University Rotterdam and New Zealand Finance Colloquium for valuable comments. The authors gratefully acknowledge financial support from Netspar and ERIM for data collection in the DHS household panel, and support from the Dutch Authority for Financial Markets for data collection in the AFM panel. The views expressed in this paper are solely those of the authors. Appendix A
Publisher Copyright:
© 2019 Elsevier B.V.