The Peculiar Scale Economies of Lotto / Philip J. Cook, Charles T. Clotfelter.

By:

Cook, Philip J

Contributor(s):

Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w3766.Publication details: Cambridge, Mass. National Bureau of Economic Research 1991.Description: 1 online resource: illustrations (black and white)Subject(s):

D80 - General

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Abstract: The best-selling lottery game in the United States is lotto, a parimutuel game of long odds and large jackpots. Unlike in the other popular lottery games (numbers and instant). there is a strong tendency for per-capita lotto sales to increase with the size of the population base. The fact that the jackpot also tends to increase with population size is not a complete explanation, since the probability of winning tends to be inversely proportional to state population. our explanation for why the games are more successful in large states is that players tend to judge the likelihood of winning based on the frequency with which someone wins; then a larger state can offer a game at longer odds but the same perceived probability of winning as a smaller state.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w3766 (Browse shelf(Opens below))	Not For Loan

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Previous	nber w3763 Sources of Cycles in Japan, 1975-1987 /	nber w3764 Learning and Wage Dynamics /	nber w3765 Life Insurance Inadequacy - Evidence From a Sample of Older Widows /	nber w3766 The Peculiar Scale Economies of Lotto /	nber w3767 Foreign Direct Investment, Productive Capacity and Exchange Rate Regimes /	nber w3768 The Search for R&D Spillovers /	nber w3769 The "Gambler's Fallacy" in Lottery Play /	Next

July 1991.

The best-selling lottery game in the United States is lotto, a parimutuel game of long odds and large jackpots. Unlike in the other popular lottery games (numbers and instant). there is a strong tendency for per-capita lotto sales to increase with the size of the population base. The fact that the jackpot also tends to increase with population size is not a complete explanation, since the probability of winning tends to be inversely proportional to state population. our explanation for why the games are more successful in large states is that players tend to judge the likelihood of winning based on the frequency with which someone wins; then a larger state can offer a game at longer odds but the same perceived probability of winning as a smaller state.