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Lottery "strategies": monetizing players' behavioral biases

Author

Listed:
  • Raman Kachurka

    (Faculty of Economic Sciences, University of Warsaw)

  • Michał Wiktor Krawczyk

    (Faculty of Economic Sciences, University of Warsaw)

Abstract

The popularity of lotteries around the world is puzzling. In this paper, we study one factor, which might contribute to this phenomenon, namely lottery “strategies” that could allegedly improve players’ odds. In an online survey of lottery players we find that such strategies are popular and their use is related to more frequent lottery play and a number of personality traits and beliefs about gambling. Systematically searching for websites and books, we amass the largest dataset of lottery strategies in existence. We subsequently analyze their descriptions, categorize them, and investigate how they exploit their target audience’s behavioral biases, including the illusion of control, authority bias, magical thinking, the illusion of correlation, gambler’s fallacy, hot hand fallacy, representativeness heuristic, availability heuristic, and regret aversion. We find that the strategies maintain gamblers’ (false) beliefs about the possibility of controlling lottery results. This exploratory work contributes to a deeper understanding of (problem) gambling and lays the foundation for the design of experiments testing how the specific features of different strategies may interact with beliefs and trigger (excessive) lottery play.

Suggested Citation

  • Raman Kachurka & Michał Wiktor Krawczyk, 2020. "Lottery "strategies": monetizing players' behavioral biases," Working Papers 2020-29, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2020-29
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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/5802/
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    References listed on IDEAS

    as
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    4. Sigrid Suetens & Claus B. Galbo-Jørgensen & Jean-Robert Tyran, 2016. "Predicting Lotto Numbers: A Natural Experiment on the Gambler's Fallacy and the Hot-Hand Fallacy," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 584-607.
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    More about this item

    Keywords

    decision making under risk; lottery strategy; illusion of control;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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