題目：Are Lottery Players Driven by Price, Risk, Long Odds or Jackpot Size? Evidence from China Lottery
主講人🦸🏿♂️：Jia Yuan，Assistant Professor of Business Economics，University of Macau
As global lottery industry generates hundreds of billions US dollar sale each year and makes significant contribution to the government tax revenue, it become more and more important to understand what factors influence the lottery demand. Economists take different approaches to understand lottery demand including effective price approach, risk-loving approach, behavioral economics’ small odds event approach or the jackpot-size approach. It is hard to separately evaluate these four different approaches as they share common factors. In this paper, we exploit a unique lottery game in China and examine the explanation power of these four approaches. This lottery game is very similar to other popular lotteries in other countries except that there is a cap policy on the grand jackpot prize, which limits each single winner’s reward. We show that this seemingly complex cap-policy actually makes the whole lottery price as well as the probability to win almost fixed all the time although the rollover money from the last round varies significantly. The fixed prize and winning probability imply almost no variation of fixed lottery price, risk or small odds, which cannot explain the observed lottery sale variation. We argue that the jackpot-size approach is more likely to explain the observed lottery demand variation.
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