The effect of paper versus realized losses on subsequent risktaking : field evidence from casino gambling

Philippe Meier, Raphael Flepp, Maximilian Rüdisser, Egon Franck

In this paper, we test the realization effect, i.e., that risk-taking increases after a paper loss, whereas risk-taking decreases after a realized loss, using gambling data from a real casino. During a particular casino visit, losses are likely perceived as paper losses because the chance to offset prior losses remains effective until leaving the casino. However, when casino customers leave the casino, the final account balance is realized. Using individual-level slot machine gambling records, we find that risk-taking after paper losses increases during a visit and that this effect is more pronounced for larger losses. Conversely, risk-taking across multiple visits is not altered if the realized losses are comparatively small, whereas risk-taking is reduced if realized losses are comparatively large

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Year of publication:	January 2020
Authors:	Meier, Philippe ; Flepp, Raphael ; Rüdisser, Maximilian ; Franck, Egon
Publisher:	Zurich : University of Zurich, Department of Business Administration
Subject:	decision making \| realization effect \| risk behavior \| loss \| field analysis \| Glücksspiel \| Gambling \| Experiment \| Verlust \| Loss \| Prospect Theory \| Prospect theory \| Entscheidung \| Decision \| Anlageverhalten \| Behavioural finance \| Risikopräferenz \| Risk attitude

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Extent:	1 Online-Ressource (circa 22 Seiten) Illustrationen
Series:	UZH Business Working Paper Series. - Zürich : Inst. für Betriebswirtschaftslehre, Univ. Zürich, ZDB-ID 2690592-9. - Vol. no. 385 UZH Business Working Paper ; No. 385
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Other identifiers:	10.5167/uzh-182628 [DOI] 10.2139/ssrn.3515981 [DOI]
Classification:	D12 - Consumer Economics: Empirical Analysis ; D14 - Personal Finance ; D81 - Criteria for Decision-Making under Risk and Uncertainty
Source:	ECONIS - Online Catalogue of the ZBW

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