Compulsive Gambling in the Stock Market: Evidence from an Emerging Market
During the COVID-19 pandemic, many new individual investors globally entered the stock markets, often pursuing speculative investment strategies that resemble gambling. A concern is that trading as a form of gambling can become addictive for some people, as documented by several recent studies in de...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2023-01-01
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| Series: | Economies |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7099/11/1/28 |
| _version_ | 1797443609820135424 |
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| author | Atcha Kamolsareeratana Roy Kouwenberg |
| author_facet | Atcha Kamolsareeratana Roy Kouwenberg |
| author_sort | Atcha Kamolsareeratana |
| collection | DOAJ |
| description | During the COVID-19 pandemic, many new individual investors globally entered the stock markets, often pursuing speculative investment strategies that resemble gambling. A concern is that trading as a form of gambling can become addictive for some people, as documented by several recent studies in developed markets. We contribute to this literature by adding new evidence from a large emerging market, Thailand, where most forms of traditional gambling are illegal. We field a diagnostic checklist from the American Psychiatric Association for compulsive gambling, changing the content of each item to refer to stock market trading instead of gambling. In a survey of 285 Thai investors, we document that 9.5% are potential problem gamblers, while 4.9% meet the stricter criteria for addiction. The trading addiction score explains speculative trading behavior such as frequent trading, day trading and buying high-risk “lottery” stocks, beyond common factors such as overconfidence and high risk-tolerance. Further, the trading addiction score is positively related to high levels of stress and alcohol use, problems often associated with gambling disorders. Our results raise awareness about investors whose objectives are more related to gambling than long-term investment, and the associated problems when such behavior becomes compulsive. |
| first_indexed | 2024-03-09T12:59:33Z |
| format | Article |
| id | doaj.art-277ffac194a647a3b9fba106f80ef307 |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-09T12:59:33Z |
| publishDate | 2023-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-277ffac194a647a3b9fba106f80ef3072023-11-30T21:56:08ZengMDPI AGEconomies2227-70992023-01-011112810.3390/economies11010028Compulsive Gambling in the Stock Market: Evidence from an Emerging MarketAtcha Kamolsareeratana0Roy Kouwenberg1College of Management, Mahidol University, Bangkok 10400, ThailandCollege of Management, Mahidol University, Bangkok 10400, ThailandDuring the COVID-19 pandemic, many new individual investors globally entered the stock markets, often pursuing speculative investment strategies that resemble gambling. A concern is that trading as a form of gambling can become addictive for some people, as documented by several recent studies in developed markets. We contribute to this literature by adding new evidence from a large emerging market, Thailand, where most forms of traditional gambling are illegal. We field a diagnostic checklist from the American Psychiatric Association for compulsive gambling, changing the content of each item to refer to stock market trading instead of gambling. In a survey of 285 Thai investors, we document that 9.5% are potential problem gamblers, while 4.9% meet the stricter criteria for addiction. The trading addiction score explains speculative trading behavior such as frequent trading, day trading and buying high-risk “lottery” stocks, beyond common factors such as overconfidence and high risk-tolerance. Further, the trading addiction score is positively related to high levels of stress and alcohol use, problems often associated with gambling disorders. Our results raise awareness about investors whose objectives are more related to gambling than long-term investment, and the associated problems when such behavior becomes compulsive.https://www.mdpi.com/2227-7099/11/1/28individual investorstrading behaviorgamblingspeculationproblem gambling |
| spellingShingle | Atcha Kamolsareeratana Roy Kouwenberg Compulsive Gambling in the Stock Market: Evidence from an Emerging Market Economies individual investors trading behavior gambling speculation problem gambling |
| title | Compulsive Gambling in the Stock Market: Evidence from an Emerging Market |
| title_full | Compulsive Gambling in the Stock Market: Evidence from an Emerging Market |
| title_fullStr | Compulsive Gambling in the Stock Market: Evidence from an Emerging Market |
| title_full_unstemmed | Compulsive Gambling in the Stock Market: Evidence from an Emerging Market |
| title_short | Compulsive Gambling in the Stock Market: Evidence from an Emerging Market |
| title_sort | compulsive gambling in the stock market evidence from an emerging market |
| topic | individual investors trading behavior gambling speculation problem gambling |
| url | https://www.mdpi.com/2227-7099/11/1/28 |
| work_keys_str_mv | AT atchakamolsareeratana compulsivegamblinginthestockmarketevidencefromanemergingmarket AT roykouwenberg compulsivegamblinginthestockmarketevidencefromanemergingmarket |