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On lottery sales, jackpot sizes and irrationality: A cautionary note

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  • Peel, D.A.

Abstract

Jackpot size has a greater impact than expected price as a determinant of lottery sales suggesting that agents exhibit irrational lotto mania. We demonstrate why this conclusion is problematical by considering the reduced form obtained if agents are described by Cumulative Prospect Theory.

Suggested Citation

  • Peel, D.A., 2010. "On lottery sales, jackpot sizes and irrationality: A cautionary note," Economics Letters, Elsevier, vol. 109(3), pages 161-163, December.
    • Handle: RePEc:eee:ecolet:v:109:y:2010:i:3:p:161-163
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    References listed on IDEAS

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    1. Shlomo Benartzi & Richard H. Thaler, 1995. "Myopic Loss Aversion and the Equity Premium Puzzle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(1), pages 73-92.
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    6. Beenstock, Michael & Haitovsky, Yoel, 2001. "Lottomania and other anomalies in the market for lotto," Journal of Economic Psychology, Elsevier, vol. 22(6), pages 721-744, December.
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    10. repec:bla:econom:v:58:y:1991:i:229:p:1-16 is not listed on IDEAS
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    Cited by:

    1. Gabrielyan, Gnel & Just, David R., 2017. "Economic Factors Affecting Lottery Sales: An Examination of Maine State Lottery Sales," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258419, Agricultural and Applied Economics Association.
    2. Brian A. Polin & Eyal Ben Isaac & Itzhak Aharon, 2021. "Patterns in manually selected numbers in the Israeli lottery," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 16(4), pages 1039-1059, July.
    3. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    4. repec:cup:judgdm:v:16:y:2021:i:4:p:1039-1059 is not listed on IDEAS
    5. Lena C. Quilty & Daniela S. S. Lobo & Martin Zack & Courtney Crewe-Brown & Alexander Blaszczynski, 2016. "Hitting the jackpot: the influence of monetary payout on gambling behaviour," International Gambling Studies, Taylor & Francis Journals, vol. 16(3), pages 481-499, September.

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