Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86710
Authors: 
Kocher, Martin
Krawczyk, Michal
van Winden, Frans
Year of Publication: 
2009
Series/Report no.: 
Tinbergen Institute Discussion Paper 09-098/1
Abstract: 
We analyze one of the explanations why people participate in lotteries. Our hypothesis stipulates that part of the value that a unit of money buys in lotteries is consumed before the actual resolution in the form of emotions such as hope. In other words, a person holding a lottery ticket may prefer a delayed resolution of risk due to positive anticipatory emotions. This conjecture is tested in an experiment with real lottery tickets. We show that our theoretical considerations may contribute to explaining empirical puzzles associated with lottery participation, timing of resolution and the spreading of drawings. More specifically, we find that a substantial number of participants prefer delayed resolution, that anticipated thrill is the main variable explaining this choice, that emotions actually experienced during the waiting period are indeed predominantly positive and correlated with predictions. Finally, we find that a great majority prefers to 'spread' chances, that is, to obtain one ticket for each of two drawings rather than two for the same drawing.
Subjects: 
lotteries
anticipation
experiment
JEL: 
C93
D81
Document Type: 
Working Paper

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