Online Gambling Behavior: The Impacts of Cumulative Outcomes, Recent Outcomes, and Prior Use

Xiao Ma (xma@bus.wisc.edu), Seung Hyun Kim (seungkim@yonsei.ac.kr) and Sung S. Kim (skim@bus.wisc.edu)
Additional contact information
Xiao Ma: Department of Information Systems, Sam M. Walton College of Business, University of Arkansas, Fayettleville, Arkansas 72701
Seung Hyun Kim: School of Business, Yonsei University, Seoul 120-479, Korea; and Department of Information Systems, National University of Singapore, Singapore 117417
Sung S. Kim: Department of Operations and Information Management, Wisconsin School of Business, University of Wisconsin–Madison, Madison, Wisconsin 53706

Information Systems Research, 2014, vol. 25, issue 3, 511-527

Abstract: The objective of this work is to examine various psychological forces underlying the behavior of people’s online gambling, an increasingly popular form of entertainment in the gaming industry. Drawing on extant theories, we first developed a model of how cumulative outcomes, recent outcomes, and prior use affect online gambling behavior differently. We empirically tested the model using longitudinal panel data collected over eight months from 22,304 actual users of a gambling website. The results of a multilevel panel data analysis strongly supported our hypotheses. First, consistent with gambling theory, individuals' online gambling was found to increase with any increase in a cumulative net gain or cumulative net loss. Second, as the availability heuristic prescribes, a recent loss reduced online gambling, whereas a recent gain increased it. Third, consistent with the literature on repeated behavior, regular use and extended use moderated the relationship between current and subsequent gambling. Taken together, the present study clarifies how people react differently to immediate and cumulative outcomes and also how regular use and extended use facilitate routine behavior in the context of online gambling. In general, our findings suggest that the three perspectives, i.e., gambling theory, the availability heuristic, and repeated behavior, should be taken into account to understand online gambling, which is in essence a series of risk-taking attempts with the potential of eventually becoming routine behavior. This study is expected to offer valuable insights into other types of online games that could engage people in risking real or cyber money and, at the same time, could be easily enmeshed with everyday life (e.g., fantasy sports, online virtual worlds).

Keywords: online user behavior; online gambling; repeated behavior; decision making under uncertainty; panel data; multilevel analysis; hierarchical analysis (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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