Discounting Behavior in Problem Gambling

available at SSRN

Problem gamblers discount delayed rewards more rapidly than do non-gambling controls. Understanding this impulsivity is important for developing treatment options. In this article, we seek to make two contributions: First, we ask which of the currently debated economic models of intertemporal choice (exponential vs. hyperbolic vs. quasi-hyperbolic) provides the best description of gamblers' discounting behavior. Second, we ask how problem gamblers differ from habitual gamblers and non-gambling controls within the most favored parametrization. Our analysis reveals that the quasi-hyperbolic discounting model is strongly favored over the other two parameterizations. Within the quasi-hyperbolic discounting model, problem gamblers have both a significantly stronger present bias and a smaller long-run discount factor, which suggests that gamblers' impulsivity has two distinct sources.


Catharina Probst
Levent Neyse
Stephan Wolff
Christian Kaernbach
Thilo van Eimeren


JEL Classification
C91, D87