Skip to main content
placeholder image

Are paper winners gamblers? Evidence from Australian retail investors

Journal Article


Abstract


  • This study examines stock market gambling using a comprehensive set of investor characteristics and past portfolio performance measures. We find that retail investors overinvest in ‘lottery stocks’, stocks with gambling-like properties. Significant portfolio underperformance is the result of gambling through lottery stocks. Investors are more likely to gamble following recent portfolio paper gains, regardless of realised performance, providing new evidence that paper gains trigger a house money effect. Investors trading greater values or holding more stocks, and older and female investors, are less likely to invest in lottery stocks.

Authors


  •   Frino, Alex
  •   Lepone, Grace (external author)
  •   Wright, Danika (external author)

Publication Date


  • 2019

Citation


  • Frino, A., Lepone, G. & Wright, D. (2019). Are paper winners gamblers? Evidence from Australian retail investors. Accounting and Finance, 59 (S1), 593-614.

Scopus Eid


  • 2-s2.0-85064048078

Has Global Citation Frequency


Number Of Pages


  • 21

Start Page


  • 593

End Page


  • 614

Volume


  • 59

Issue


  • S1

Place Of Publication


  • Australia

Abstract


  • This study examines stock market gambling using a comprehensive set of investor characteristics and past portfolio performance measures. We find that retail investors overinvest in ‘lottery stocks’, stocks with gambling-like properties. Significant portfolio underperformance is the result of gambling through lottery stocks. Investors are more likely to gamble following recent portfolio paper gains, regardless of realised performance, providing new evidence that paper gains trigger a house money effect. Investors trading greater values or holding more stocks, and older and female investors, are less likely to invest in lottery stocks.

Authors


  •   Frino, Alex
  •   Lepone, Grace (external author)
  •   Wright, Danika (external author)

Publication Date


  • 2019

Citation


  • Frino, A., Lepone, G. & Wright, D. (2019). Are paper winners gamblers? Evidence from Australian retail investors. Accounting and Finance, 59 (S1), 593-614.

Scopus Eid


  • 2-s2.0-85064048078

Has Global Citation Frequency


Number Of Pages


  • 21

Start Page


  • 593

End Page


  • 614

Volume


  • 59

Issue


  • S1

Place Of Publication


  • Australia