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.

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Journal of Banking & Finance
Erasmus University Rotterdam

Cox, R., Kamolsareeratana, A. (Atcha), & Kouwenberg, R. (2020). Compulsive gambling in the financial markets: Evidence from two investor surveys. Journal of Banking & Finance, 111. doi:10.1016/j.jbankfin.2019.105709