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Title:A theory of demand for gambles PDF Logo
Authors:Nyman, John A.
Issue Date:2004
Series/Report no.:Minnesota Working Papers / Center for Economic Research, Department of Economics, University of Minnesota 322
Abstract:Although gambling is primarily an economic activity, no single theory of the demand for gambles has gained wide-spread acceptance among economists. This paper proposes a simple model of the demand for gambling that is based on the standard economic assumptions that (1) resources are scarce and (2) consumer’s utility increases with income at a decreasing rate. This model has the advantages that (1) it is based solely on changes in income, (2) is potentially applicable to most consumers, (3) preserves the assumption of diminishing marginal utility of income, (4) is consistent with the insurance-buying gambler, and (5) has intuitive appeal.
Subjects:gambling
demand for gambles
expected utility theory
JEL:D81
D11
Document Type:Working Paper
Appears in Collections:Minnesota Working Papers, Department of Economics - Center for Economic Research, University of Minnesota

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