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When the Cat's Away, the Mice Will Play: Gambling Behaviour of Visitors in Australia

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  • Bin Dong

    ()
    (QUT)

  • Benno Torgler

    ()
    (QUT)

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    Abstract

    What happens if national legal laws or enforcements and social norms are no longer able to directly regulate individual behaviour? According to our knowledge, not much empirical evidence has emerged answering such a seemingly simple question. The challenge is to distinguish between the effects of social norm and of legal enforcement. One way to explore such a question in an almost natural quasi-experimental setting is to focus on tourists’ behaviour. Tourists are visiting another country for a relatively short period of time and are acting in a different (legal) environment where formal and informal rules are different to those found in their own country. Using data from Australia we focus on gambling activities since these are prohibited in some countries. We find that tourists from countries where gambling is prohibited spend a significantly larger share of their entertainment expenditure on gambling than those who come from countries where gambling is legalized. Thus, gambling increases (“mice playâ€) without legal enforcement (“when the cat is awayâ€). It is also noteworthy that there seems to be a lack of internalized social norms that would prevent tourists from partaking in these gambling activities.

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    File URL: http://external-apps.qut.edu.au/business/documents/discussionPapers/2010/WP255.pdf
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    Bibliographic Info

    Paper provided by School of Economics and Finance, Queensland University of Technology in its series School of Economics and Finance Discussion Papers and Working Papers Series with number 255.

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    Length: 8 pages
    Date of creation: 25 Mar 2010
    Date of revision:
    Handle: RePEc:qut:dpaper:255

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    Web page: http://www.bus.qut.edu.au/faculty/economics/
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    Keywords: gambling; legal enforcement; social norms;

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    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    2. Elster, Jon, 1989. "Social Norms and Economic Theory," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 99-117, Fall.
    3. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
    4. Posner, Richard A, 1997. "Social Norms and the Law: An Economic Approach," American Economic Review, American Economic Association, vol. 87(2), pages 365-69, May.
    5. Raymond Fisman & Edward Miguel, 2007. "Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1020-1048, December.
    6. Torgler, Benno, 2006. "The importance of faith: Tax morale and religiosity," Journal of Economic Behavior & Organization, Elsevier, vol. 61(1), pages 81-109, September.
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