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On lottery sales, jackpot sizes and irrationality: A cautionary note

Research output: Contribution to journalJournal article

Published
<mark>Journal publication date</mark>12/2010
<mark>Journal</mark>Economics Letters
Issue number3
Volume109
Number of pages3
Pages (from-to)161-163
Publication statusPublished
Original languageEnglish

Abstract

Jackpot size has a greater impact than expected price as a determinant of lottery sales suggesting that agents exhibit irrational lotto mania. We demonstrate why this conclusion is problematical by considering the reduced form obtained if agents are described by Cumulative Prospect Theory.