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Type | Journal Article |
Scope | Discipline-based scholarship |
Title | Revisiting the house money effect in the field: Evidence from casino jackpots |
Organization Unit | |
Authors |
|
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 |
PDF File | Download from ZORA |
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