Optimal Lottery Design for Public Financing

Datos Bibliográficos

ID9720099
AutoresAkira Maeda (0000-0001-7334-5438, Kyoto University, autor de correspondencia)
Año2008
Volumen118
Número532
Páginas1698-1718
Fecha de publicación2008-10-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2008.02186.x
OpenAlexW1981979041
IdiomaEN
Citas recibidas1
Referencias citadas26

This article develops a model of optimal lottery design for public financing, on the assumption that economic agents view buying lottery tickets as a form of entertainment. Given that lotteries are optimally designed, it offers two findings: (1) the fundraising potential of a lottery is independent of its type (specifically, of whether it is a fixed-prize type or a pari mutuel); and (2) the ratio of the optimal winning prize amount in each prize class to total lottery sales is equalised to the elasticity of demand for lottery ticket purchases with respect to the winning prize in each prize class. Copyright © The Author(s). Journal compilation © Royal Economic Society 2008

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