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Stata and the One-Armed Bandit


  • Martin Weiss

    () (University of Tuebingen, Germany)


I research the market efficiency of the German 6/49 parimutuel lottery game using Stata. To this end, I investigate the existence of profit opportunities for particularly unpopular combinations of numbers (Papachristou and Karamanis (1998)), employing the covariates proposed by Henze and Riedwyl (1998). Furthermore, I examine the time series behavior of stakes bet in relation to the size of the jackpot in the respective draw. In particular, I attempt to verify the conjecture that the skewness of the payoff distribution drives bettors' appetite for participation (Golec and Tamarkin (1998)). Along the way, I show how one can set up Stata to retrieve data from the internet, unpack them automatically and shape them for the analysis. I also show how one can schedule tasks to automate the process further.

Suggested Citation

  • Martin Weiss, 2008. "Stata and the One-Armed Bandit," Fall North American Stata Users' Group Meetings 2008 6, Stata Users Group.
  • Handle: RePEc:boc:fsug08:6

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