Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46664
Authors: 
Desierto, Desiree A.
Nye, John V. C.
Pamintuan, Jema M.
Year of Publication: 
2011
Series/Report no.: 
Discussion paper // School of Economics, University of the Philippines 2011,03
Abstract: 
We show how cheating in illegal gambling can be sustained in equilibrium, even when gamblers are aware of it. Not only is cheating profit-maximizing for operators, but it can also be utility-maximizing if it provides gamblers the opportunity to engage in other related activities that generate non-monetary rewards, such as practicing superstitions. This, in turn, suggests why legalizing gambling might not fully capture the gains from the illegal market - operators and gamblers both prefer cheating, but this would be harder to hide in a legalized environment. We illustrate the model, generate results, and verify them empirically, using the example of jueteng, an illegal numbers game in the Philippines.
Document Type: 
Working Paper

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