Advanced Search
MyIDEAS: Login to save this paper or follow this series

In Search of a Fair Bet in the Lottery

Contents:

Author Info

Abstract

Although state-operated lotto games have the worst average expected payoffs among common games of chance, because the jackpot can accumulate, the maximum expected payoff is potentially unlimited. It is possible, therefore, that lotto can exhibit a positive expected return. This paper examines 18,000 drawings in 34 American lotteries and finds approximately 1% of these drawings provided players with a fair bet. Furthermore, if it were possible for a bettor to purchase every possible combination, most lotteries commonly experience circumstances where such a purchase would provide a positive return with 11% of the drawings providing a fair bet to the player.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://web.williams.edu/Economics/wp/mathesonlottery.pdf
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2003-16.

as in new window
Length: 26 pages
Date of creation: Aug 2003
Date of revision:
Publication status: published in Eastern Economic Journal, Vol. 32:4 (Fall 2006), 673- 684.
Handle: RePEc:wil:wileco:2003-16

Contact details of provider:
Postal: Williamstown, MA 01267
Phone: 413 597 2476
Fax: 413 597 4045
Email:
Web page: http://econ.williams.edu
More information through EDIRC

Order Information:
Email:

Related research

Keywords: Lotto; Lottery; Gambling;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Victor Matheson, 2001. "When Are State Lotteries a Good Bet (Revisited)?," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 55-70, Winter.
  2. L. C. MacLean & W. T. Ziemba & G. Blazenko, 1992. "Growth Versus Security in Dynamic Investment Analysis," Management Science, INFORMS, INFORMS, vol. 38(11), pages 1562-1585, November.
  3. Philip J. Cook & Charles T. Clotfelter, 1991. "The Peculiar Scale Economies of Lotto," NBER Working Papers 3766, National Bureau of Economic Research, Inc.
  4. Gulley, O. David & Scott, Frank A. Jr., 1993. "The Demand for Wagering on State-Operated Lotto Games," National Tax Journal, National Tax Association, vol. 46(1), pages 13-22, March.
  5. Shapira, Zur & Venezia, Itzhak, 1992. "Size and frequency of prizes as determinants of the demand for lotteries," Organizational Behavior and Human Decision Processes, Elsevier, Elsevier, vol. 52(2), pages 307-318, July.
  6. Scott, Frank A, Jr & Gulley, O David, 1995. "Testing for Efficiency in Lotto Markets," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 33(2), pages 175-88, April.
  7. Victor A. Matheson & Kent R. Grote, 2003. "Jacking Up the Jackpot: Are Lotto Consumers Fooled by Annuity Payments?," Public Finance Review, , , vol. 31(5), pages 550-567, September.
  8. Clotfelter, Charles T & Cook, Philip J, 1990. "On the Economics of State Lotteries," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 4(4), pages 105-19, Fall.
  9. Kent Grote & Victor Matheson, 2006. "Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?," Atlantic Economic Journal, International Atlantic Economic Society, International Atlantic Economic Society, vol. 34(1), pages 85-100, March.
  10. Anthony C. Krautmann & James E. Ciecka, 1993. "When Are State Lotteries a Good Bet?," Eastern Economic Journal, Eastern Economic Association, vol. 19(2), pages 157-164, Spring.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers, College of the Holy Cross, Department of Economics 1110, College of the Holy Cross, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wil:wileco:2003-16. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Stephen Sheppard).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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