Are paper winners gamblers? Evidence from Australian retail investors

Alex Frino, Grace Lepone, Danika Wright

Research output: Contribution to journalArticlepeer-review

6 Citations (Scopus)


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.
Original languageEnglish
Pages (from-to)593-614
Number of pages22
JournalAccounting and Finance
Issue numberS1
Early online date4 Oct 2017
Publication statusPublished - Apr 2019


  • Gambling preference
  • House money effect
  • Lottery stocks
  • Prospect theory


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