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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Revisiting the house money effect in the field: Evidence from casino jackpots |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Economics Letters |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0165-1765 |
| Volume | 181 |
| Page Range | 146 - 148 |
| Date | 2019 |
| Abstract Text | This paper tests the house money effect, i.e., that prior gains increase subsequent risk-taking behavior, in the field. We use individual-level slot machine gambling records of 5,169 players from a real casino and employ jackpot hits as exogenous house money shocks. Our results show that players wager significantly less money after hitting a jackpot, which implies that players reduce their risk-taking behavior and thus act more cautiously after experiencing gains. We fail to replicate the house money effect in the field and find evidence for a reverse house money effect. Furthermore, while risk-taking behavior is reduced after hitting a jackpot, the jackpot size has no additional effect. |
| Digital Object Identifier | 10.1016/j.econlet.2019.05.026 |
| Other Identification Number | merlin-id:17814 |
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