For certain investors, the excitement of playing the stock market is a lot like the excitement of playing the lottery, and one activity can substitute for the other, Anne Jones Dorn and two colleagues write in Management Science. In a study of Powerball and Mega Millions lotteries in the US, the researchers found that doubling the jackpot size is associated with a 0.6pc drop in small-trade stock-market participation relative to its average level. The results suggest that for some people, thrill-seeking underlies both activities.
(Source: Management Science)
Published in Dawn, Economic & Business, April 27th, 2015
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