Risk Attitudes and Impulsivity: an Investigation using Gamblers
Abstract
The inclination to gamble is conceived by psychologists as impulsivity, i.e. the inability to postpone an immediate gratification. Such phenomenon is explained by hyperbolic discounting, which may rationalize why subjects cannot refrain when they have the opportunity to gamble although they would prefer not to suffer the negative consequences. Strikingly, however, almost no attention is paid in this branch of the literature to the role played by risk attitudes. In contrast, economists exert a lot of effort analyzing and trying to identify risk and time preference, but no attention is paid to gambling disorders.
The main goal of this paper is to try to fill this gap and to assess whether risk attitudes can complement hyperbolic discounting in order to explain disordered gambling. An incentivized risk elicitation task is administered together with a questionnaire (also including the DSM-V diagnostic tool and a delayed reward task) to a sample of gamblers in a betting agency.
Evidence shows that risk preferences are indeed a significant correlate of disordered gambling, and in particular with the DSM items that focus on the gambling behavior rather than on the emotional sphere of the subjects. In contrast, the severity of disordered gambling does not correlate with a proxy of hyperbolic discounting alone. Results also show that a large fraction of the subjects (more than 15%) should be classified as disordered gamblers.