Abstract
Using a data set that combines trading records in a financial investment simulation with survey responses, this study provides evidence that a domain-specific variant of risk-taking propensity, namely risk taking in gambling (but not in investing) situations, predicts the volume of trades of financial investors. We find that investors' gambling risk-taking propensity, measured by the Weber, Blais, and Betz [2002], Domain-Specific-Risk-Taking (DOSPERT) gambling subscale, increases the number of trades made and hence transaction costs, as well as the extent of their day trading. The short (four-item) gambling risk-taking propensity DOSPERT subscale thus provides a useful diagnostic addition to risk attitude assessment instruments for private investors.
Original language | English (US) |
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Pages (from-to) | 65-78 |
Number of pages | 14 |
Journal | Journal of Behavioral Finance |
Volume | 14 |
Issue number | 1 |
DOIs | |
State | Published - 2013 |
Externally published | Yes |
All Science Journal Classification (ASJC) codes
- Experimental and Cognitive Psychology
- Finance
Keywords
- DOSPERT scale
- Day trading
- Domain-specific risk taking
- Risk attitude
- Trading volume