RUBAYAT SARWAR

RESEARH OUTPUTS

Job Market Paper: ''Do People Gamble More if They Can Cash Out?'' [PDF]

Innovative betting products, such as bets with cash-out options, have become increasingly popular. But would people still stake more money on cash-out bets than on non cash-out bets if both have the same ex-ante winning probability and return? In a laboratory experiment, we find higher betting stakes when cash-out options are available, despite fair pricing of bets and cash-out payments. This contradicts Expected Utility Theory, which predicts identical optimal stakes across both products. However, Rank Dependent Utility Theory with probability distortion can explain this deviation: state-contingent cash-out plans allow bettors to endogenously reshape the distribution of final wealth outcomes, making cash-out bets appear more valuable than equivalent non cash-out bets and encouraging greater risk-taking.

Working Paper: ''Do People Spend More on Multi-Bets?''

Multi-bets combine multiple sporting events into one wager and have become increasingly popular despite their low compound winning probabilities. Are there any behavioural factors, which can drive bettors towards multi-bets over single bets? In a laboratory experiment holding ex-ante winning probabilities and returns constant, we find higher stakes on multi-bets, particularly when compound winning probabilities are not disclosed. Our findings suggest two behavioural drivers: additional thrill from the sequential resolution of uncertainty across events and misjudgment of compound winning probabilities due to anchoring on relatively high individual-event probabilities and insufficient adjustment for compounding.

Publication: ''Money in Politics: How Does It Affect Election Outcomes?'' (with Thanh Le, Ilke Onur, and Erkan Yalcin), SAGE Open, 2024 [Journal Article]

Work in Progress : ''Do People Believe That They Know Better Than the Bookies? Bettors' Curse''

This project examines how individuals overweight private signals relative to publicly available information when making betting decisions. Using controlled laboratory experiments, we examine whether individuals place excessive confidence in their own private information, even when market prices already aggregate broader information from all participants.