Presentation Type

Event

Location

Caesars Palace, Las Vegas Pompeian III

Start Date

30-5-2013 4:00 PM

End Date

30-5-2013 5:30 PM

Disciplines

Gaming and Casino Operations Management | International Business | Mental and Social Health | Psychology

Abstract

I explore a unique, individual level, lottery betting panel data and show that lottery gambling is significantly affected by lottery winning history even though this winning history is shown to be merely an exogenous random shock. This panel data records lottery players’ collective lottery betting behaviors on a Chinese online lottery purchase website. This website lists each player’s lottery investment performance, the ratio between the lottery return and the lottery investment in the past three months, for lottery players’ reference and this ratio is shown to be an independent random shock across players. Based on the data with around 400,000 observations, I find that this random shock significantly affects lottery players’ purchasing behaviors. Specifically, collective lottery gamblers are significantly more likely to join a lottery package proposed by someone with a higher winning rate; lottery players are spending more money on the proposers with higher return rates.

Keywords

Gambling, Gambling Fallacy, Irrationality, Lottery Betting

Comments

Moderator: Michael J.A. Wohl

Session 3-4-C Studying Patterns of Play: Specific Games

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May 30th, 4:00 PM May 30th, 5:30 PM

Session 3-4-C: Are Lottery Players Affected by Random Shocks? Evidence from China’s Individual Lottery Betting Panel Data

Caesars Palace, Las Vegas Pompeian III

I explore a unique, individual level, lottery betting panel data and show that lottery gambling is significantly affected by lottery winning history even though this winning history is shown to be merely an exogenous random shock. This panel data records lottery players’ collective lottery betting behaviors on a Chinese online lottery purchase website. This website lists each player’s lottery investment performance, the ratio between the lottery return and the lottery investment in the past three months, for lottery players’ reference and this ratio is shown to be an independent random shock across players. Based on the data with around 400,000 observations, I find that this random shock significantly affects lottery players’ purchasing behaviors. Specifically, collective lottery gamblers are significantly more likely to join a lottery package proposed by someone with a higher winning rate; lottery players are spending more money on the proposers with higher return rates.