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Understanding gambling behaviour and risk attitudes using cryptocurrency-based casino blockchain data.
Jonathan Meng1, Feng Fu1,2
1Department of Mathematics, Dartmouth College, Hanover, NH 03755, USA.
Royal Society Open Science
|November 18, 2020
Summary
Gambling involves significant risk, yet remains popular. This study analyzes real-world betting data from a decentralized application to understand gambler risk attitudes and strategies.
Area of Science:
- Behavioral Economics
- Quantitative Finance
- Blockchain Technology
Background:
- Gambler's ruin theory highlights inherent risks in gambling.
- Prospect theory and experiments offer insights into risk attitudes.
- Real-world gambling data collection for validation is challenging.
Purpose of the Study:
- To analyze empirical gambling data to understand risk-taking behavior.
- To validate theoretical models of gambling and decision-making.
- To investigate gambling strategies and risk preferences.
Main Methods:
- Collected publicly available betting data from a decentralized application (DApp) on the Ethereum blockchain.
- Utilized a dataset including bet timestamps, wagers, win probabilities, user IDs, and profits.
- Analyzed data using probability-theoretic models and examined gambling systems.
Main Results:
- Identified empirical examples of gambling systems within the dataset.
- Provided insights into the dynamic nature of risk attitudes in betting.
- Demonstrated the utility of blockchain data for studying financial behavior.
Conclusions:
- Blockchain data offers a valuable resource for understanding real-world gambling behavior.
- Findings contribute to a deeper understanding of risk preferences in financial decision-making.
- The study bridges theoretical models with empirical evidence in gambling research.
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