IDEAS home Printed from https://ideas.repec.org/a/bla/ecinqu/v47y2009i3p500-511.html
   My bibliography  Save this article

Underpricing In Public Lotteries: A Critique Of User-Pay And All-Pay Tariffs

Author

Listed:
  • DAVID SCROGIN

Abstract

"A body of literature spanning from medical ethics to public economics has amassed regarding the rationing of underpriced public resources. This study investigates the effects of price on entry, individual and aggregate expected consumer surplus, and tax revenues in user-pay and all-pay (AP) lotteries. Comparative statics indicate that expected surplus may increase (decrease) as price increases (decreases) if entry is sufficiently responsive though entry in AP lotteries is inelastic at all prices. Further, the lotteries are shown to be outcome equivalent under revenue equivalency. Selected results are evaluated numerically with simulations performed across a broad class of distributions describing individual private values. "("JEL "D45, D61, H42) Copyright (c) 2007 Western Economic Association International.

Suggested Citation

  • David Scrogin, 2009. "Underpricing In Public Lotteries: A Critique Of User-Pay And All-Pay Tariffs," Economic Inquiry, Western Economic Association International, vol. 47(3), pages 500-511, July.
  • Handle: RePEc:bla:ecinqu:v:47:y:2009:i:3:p:500-511
    as

    Download full text from publisher

    File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1465-7295.2007.00084.x
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Buschena, David E. & Anderson, Terry L. & Leonard, Jerry L., 2001. "Valuing Non-Marketed Goods: The Case of Elk Permit Lotteries," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 33-43, January.
    2. Tobin, James, 1970. "On Limiting the Domain of Inequality," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 263-277, October.
    3. Mumy, Gene E & Hanke, Steve H, 1975. "Public Investment Criteria for Underpriced Public Products," American Economic Review, American Economic Association, vol. 65(4), pages 712-720, September.
    4. Taylor, Grant A. & Tsui, Kevin K. K. & Zhu, Lijing, 2003. "Lottery or waiting-line auction?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1313-1334, May.
    5. Julie Berry Cullen & Brian A Jacob & Steven Levitt, 2006. "The Effect of School Choice on Participants: Evidence from Randomized Lotteries," Econometrica, Econometric Society, vol. 74(5), pages 1191-1230, September.
    6. Joseph Seneca, 1970. "The welfare effects of zero pricing of public goods," Public Choice, Springer, vol. 8(1), pages 101-110, March.
    7. Wijkander, Hans, 1988. "Equity and Efficiency in Public Sector Pricing: A Case for Stochastic Rationing," Econometrica, Econometric Society, vol. 56(6), pages 1455-1465, November.
    8. Kemp, Simon & Bolle, Friedel, 1999. "Preferences in distributing scarce goods," Journal of Economic Psychology, Elsevier, vol. 20(1), pages 105-120, February.
    9. Edward L. Glaeser & Erzo F. P. Luttmer, 2003. "The Misallocation of Housing Under Rent Control," American Economic Review, American Economic Association, vol. 93(4), pages 1027-1046, September.
    10. Boyce, John R, 1994. "Allocation of Goods by Lottery," Economic Inquiry, Western Economic Association International, vol. 32(3), pages 457-476, July.
    11. Scrogin, David, 2005. "Lottery-rationed public access under alternative tariff arrangements: changes in quality, quantity, and expected utility," Journal of Environmental Economics and Management, Elsevier, vol. 50(1), pages 189-211, July.
    12. Holt, Charles A, Jr & Sherman, Roger, 1982. "Waiting-Line Auctions," Journal of Political Economy, University of Chicago Press, vol. 90(2), pages 280-294, April.
    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


    Cited by:

    1. Wei-chun Tseng & Shuhui Chiu, 2014. "An anti-bullying and keeping-friendship school enrollment lottery," Economics Bulletin, AccessEcon, vol. 34(1), pages 1-15.
    2. Adrienne Ohler & Hayley Chouinard & Jonathan Yoder, 2014. "Interest group incentives for post-lottery trade restrictions," Journal of Regulatory Economics, Springer, vol. 45(3), pages 281-304, June.

    More about this item

    JEL classification:

    • D45 - Microeconomics - - Market Structure, Pricing, and Design - - - Rationing; Licensing
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

    Statistics

    Access and download statistics

    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:bla:ecinqu:v:47:y:2009:i:3:p:500-511. 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: (Christopher F. Baum) or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/weaaaea.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.