Gambling Preferences, Options Markets, and Volatility

Abstract This study examines whether the gambling behavior of investors affects volume and volatility in financial markets. Focusing on the options market, we find that the ratio of call option volume relative to total option volume is greatest for stocks with return distributions that resemble lotteries. Consistent with the theoretical predictions of Stein (1987), we demonstrate that gambling-motivated trading in the options market influences future spot price volatility. These results not only identify a link between lottery preferences in the stock market and the options market, but they also suggest that lottery preferences can lead to destabilized stock prices

The Roots and Fruits of Social Status in Small-Scale Human Societies

Since humans have lived in small-scale societies for the majority of their existence, investigation of the determinants and reproductive outcomes of status acquisition in these societies can help elucidate the origins of status psychology. In even the most egalitarian foragers and horticulturalists, interindividual differences in physical size, production skill, generosity, or social support produce disparity in men’s political influence and mating opportunity. The reproductive advantages of status not only include higher fertility from privileged access to marriage partners and extramarital affairs but also better survival of offspring. The emergence of hereditary inequality and stratification by social class only exacerbated the rewards to status. The ethnographic record suggests status acquisition has long been subject to positive selection