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Economic Activities Under Uncertainty: The Difference Between Speculation, Investment and Gambling

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  • Raphael Max
  • Alexander Kriebitz
  • Christoph Luetge

Abstract

In the ethical discourse about financial markets, the terms “investment”, “speculation” and “gambling” often seem confusing and lack a clear distinction. The inconsistent use of this terminology has concrete consequences for the public perception. We attempt to establish a concept which draws a clear line between these activities and can serve as a baseline for discourse about how to assess investment, speculation and gambling on a normative level. We analyze existing literature and develop a conceptual framework to provide an overview of the differences between investment, speculation and gambling. We conclude that gambling differs structurally from investment and speculation in terms of the classic distinction between risk and uncertainty and the separation between consuming and non-consuming activities. Moreover, we arrive at the conclusion that investment and speculation share too many similarities to be separated in a consistent way.

Suggested Citation

  • Raphael Max & Alexander Kriebitz & Christoph Luetge, 2020. "Economic Activities Under Uncertainty: The Difference Between Speculation, Investment and Gambling," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 10(1), pages 1-28, July.
    • Handle: RePEc:ibn:jmsjnl:v:10:y:2020:i:1:p:28
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    References listed on IDEAS

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    1. James Angel & Douglas McCabe, 2009. "The Ethics of Speculation," Journal of Business Ethics, Springer, vol. 90(3), pages 277-286, December.
    2. Sinn, Hans-Werner, 1986. "Risiko als Produktionsfaktor," Munich Reprints in Economics 19879, University of Munich, Department of Economics.
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    Cited by:

    1. Max, Raphael & Uhl, Matthias, 2021. "The downside of moralizing financial markets: Anti-Semitic stereotypes in German MTurkers," Journal of Behavioral and Experimental Finance, Elsevier, vol. 31(C).

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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