In Search of a Fair Bet in the Lottery
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 percent of these drawings provided players with a fair bet. If it were possible for a bettor to purchase every possible combination, however, most lotteries commonly experience circumstances where such a purchase would provide a positive return with 11 percent of the drawings providing a fair bet to the player.
Volume (Year): 32 (2006)
Issue (Month): 4 (Fall)
|Contact details of provider:|| Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA|
Phone: (201) 684-7346
Web page: https://www.quinnipiac.edu/eea/
More information through EDIRC
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.:
- L. C. MacLean & W. T. Ziemba & G. Blazenko, 1992. "Growth Versus Security in Dynamic Investment Analysis," Management Science, INFORMS, vol. 38(11), pages 1562-1585, November.
- Cook, Philip J & Clotfelter, Charles T, 1993.
"The Peculiar Scale Economies of Lotto,"
American Economic Review,
American Economic Association, vol. 83(3), pages 634-43, June.
- 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.
- Kent Grote & Victor Matheson, 2006.
"Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?,"
Atlantic Economic Journal,
International Atlantic Economic Society, vol. 34(1), pages 85-100, March.
- Victor Matheson & Kent Grote, 2004. "Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?," Working Papers 0406, College of the Holy Cross, Department of Economics.
- 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.
- Victor Matheson, 2001. "When Are State Lotteries a Good Bet (Revisited)?," Eastern Economic Journal, Eastern Economic Association, vol. 27(1), pages 55-70, Winter.
- 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.
- Scott, Frank A, Jr & Gulley, O David, 1995. "Testing for Efficiency in Lotto Markets," Economic Inquiry, Western Economic Association International, vol. 33(2), pages 175-88, April.
- Clotfelter, Charles T & Cook, Philip J, 1990. "On the Economics of State Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 4(4), pages 105-19, Fall.
- Shapira, Zur & Venezia, Itzhak, 1992. "Size and frequency of prizes as determinants of the demand for lotteries," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(2), pages 307-318, July.
When requesting a correction, please mention this item's handle: RePEc:eej:eeconj:v:32:y:2006:i:4:p:673-684. 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: (Victor Matheson, College of the Holy Cross)
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.