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What Numbers to Choose for My Lottery Ticket? Behavior Anomalies in the Chinese Online Lottery Market

Author

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  • Jieyao Ding

    () (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

The Chinese Online Lottery provides field evidence of three anomalies. The first anomaly, which has previously not been documented when there is a financial incentive to overcome, is the guidance effect. Since the target game in this project is a pari-mutuel game, which means people will share the jackpot with other winners, the best strategy should be to choose the least popular numbers among others – information that people could obtain on the webpage. However, to my surprise, instead of doing so, people would choose the most popular numbers among others. The second anomaly tested is the gambler’s fallacy. Although it is proved that the gambler’s fallacy does exist, the influence lasts only three days, which is much shorter than prior research. Furthermore, the dataset’s availability makes it possible to show how the two fallacies unfold over time within a round. This was unlikely before the phenomenon of online betting. The result demonstrates that later entrants are subject to more fallacies than earlier ones. Finally, the paper adds to the evidence showing the additional, culturally contingent pull of special numbers. In China, bettors prefer to choose the lucky number 8, even it won the game in prior rounds, but they are reluctant to choose the unlucky number 14 even it has not been picked for a long while.

Suggested Citation

  • Jieyao Ding, 2011. "What Numbers to Choose for My Lottery Ticket? Behavior Anomalies in the Chinese Online Lottery Market," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2011_23, Max Planck Institute for Research on Collective Goods.
  • Handle: RePEc:mpg:wpaper:2011_23
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    File URL: http://www.coll.mpg.de/pdf_dat/2011_23online.pdf
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    References listed on IDEAS

    as
    1. Erik Snowberg & Justin Wolfers, 2010. "Explaining the Favorite-Long Shot Bias: Is it Risk-Love or Misperceptions?," Journal of Political Economy, University of Chicago Press, pages 723-746.
    2. Kocher, Martin G. & Krawczyk, Michal & van Winden, Frans, 2014. "‘Let me dream on!’ Anticipatory emotions and preference for timing in lotteries," Journal of Economic Behavior & Organization, Elsevier, vol. 98(C), pages 29-40.
    3. Raymond D. Sauer, 1998. "The Economics of Wagering Markets," Journal of Economic Literature, American Economic Association, pages 2021-2064.
    4. Jonathan Guryan & Melissa S. Kearney, 2008. "Gambling at Lucky Stores: Empirical Evidence from State Lottery Sales," American Economic Review, American Economic Association, pages 458-473.
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    Cited by:

    1. Tong V. Wang & Rogier J. D. Potter van Loon & Martijn J. van den Assem & Dennie van Dolder, 2016. "Number preferences in lotteries," Judgment and Decision Making, Society for Judgment and Decision Making, pages 243-259.

    More about this item

    Keywords

    Lottery Game; Gambler’s Fallacy; Guidance Effect; Number Culture;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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