The Gamblification of Investing: How a New Generation of Investors Is Being Born to Lose

Philip W. S. Newall and Leonardo Weiss-Cohen
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Philip W. S. Newall: School of Psychological Science, University of Bristol, Bristol BS8 1TU, UK
Leonardo Weiss-Cohen: Department of Psychology, Kingston University, London KT1 2EE, UK

IJERPH, 2022, vol. 19, issue 9, 1-10

Abstract: Investing and gambling share key features, in that both involve risk, the coming together of two or more people, and both are voluntary activities. However, investing is generally a much better way than gambling for the average person to make long-run profits. This paper reviews evidence on two types of “gamblified” investment products where this advantage does not hold for investing: high-frequency stock trading and high-risk derivatives. This review defines a gamblified investment product as one that leads most investors to lose, that attracts people at risk of experiencing gambling-related harm, and that utilizes product design principles from gambling (either by encouraging a high frequency of use or by providing the allure of big lottery-like wins). The gamblification of investing produces novel challenges for the regulation of both financial markets and gambling.

Keywords: trading; gambling; betting; financial markets; traders (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2022
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