IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v36y2025i1p145-165.html
   My bibliography  Save this article

The Effect of Financial Resources on Misconduct: Evidence from Lottery Ticket Sales

Author

Listed:
  • Justin Frake

    (Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109)

  • Heejung Byun

    (Daniels School of Business, Purdue University, West Lafayette, Indiana 47907)

  • Jihyeon Kim

    (Purdue University, West Lafayette, Indiana 47907)

Abstract

We investigate the influence of financial resources on a firm’s propensity for misconduct. Previous studies offer conflicting predictions regarding the relationship, and much of the empirical evidence suffers from issues like selection, measurement error, reverse causality, and omitted variable bias. Leveraging a difference-in-differences design, we first examine quasirandom fluctuations in retailers’ financial resources resulting from large windfalls from selling winning lottery tickets. Our results suggest that an increase in financial resources from selling a large winning lottery ticket reduces retailers’ tobacco sales to minors. Next, to rule in strain theory and to rule out alternative explanations, we leverage a second natural experiment, heterogeneity analysis, an alternate measure of misconduct, and an online randomized experiment. In doing so, we provide plausibly causal evidence on the relationship between a firm’s financial resources and its propensity for misconduct and provide potentially useful findings for policymakers and regulators.

Suggested Citation

  • Justin Frake & Heejung Byun & Jihyeon Kim, 2025. "The Effect of Financial Resources on Misconduct: Evidence from Lottery Ticket Sales," Organization Science, INFORMS, vol. 36(1), pages 145-165, January.
    • Handle: RePEc:inm:ororsc:v:36:y:2025:i:1:p:145-165
    DOI: 10.1287/orsc.2023.17541
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.2023.17541
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.2023.17541?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:36:y:2025:i:1:p:145-165. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.