Probability Distortion in the relationship between Depression and Problem Gambling: A Mediation Analysis

University essay from Göteborgs universitet/Graduate School

Abstract: We posit that people with depressive symptoms are prone to problem gambling, and explorewhether one possible driver of this is that depression increases misperception of probabilities.To test this hypothesis, we conducted a self-report survey on 230 regular gamblers recruitedfrom Prolific. Depression was measured by the Major Depression Inventory (MDI), and problemgambling gambling was assessed by the South Oaks Gambling Screen: Revised for Adolescents(SOGS-RA). Perception of probabilities was elicited from 15 prospects with non-negative payo↵s.Two central theoretical framework used in this study are mediation analysis and probabilityweighting function. Three main findings of the study are (i) probability distortion is not themediator between depression and problem gambling, as there is no linear relationship betweendepression and probability distortion, (ii) in comparison to gamblers with no problem gambling,pathological gamblers overweight small probabilities more and underweight big probabilities to alesser extent, and (iii) from an exploratory analysis, a depressive state has a quadratic e↵ect onhow individuals perceive big probabilities.

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