AbstractWe consider lotteries with reimbursements. It turns out that without loss of generality it is enough analyze lotteries where the winner gets her expenses reimbursed. We find that such a lottery (Sad-Loser) has multiple pure-strategy equilibria. We describe all equilibria and discuss their properties. In particular, we find (1) a sufficient condition for the net total spending to be higher in the Sad-Loser lottery than in the standard lottery, (2) that the Exclusion Principle holds.
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Bibliographic InfoPaper provided by University of Pittsburgh, Department of Economics in its series Working Papers with number 204.
Date of creation: Jul 2006
Date of revision: Dec 2008
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-10-14 (All new papers)
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