What floats your boat? Preference revelation from lotteries over complex goods

Jonathan K. Yoder, Adrienne M. Ohler and Hayley Chouinard ()

Journal of Environmental Economics and Management, 2014, vol. 67, issue 3, 412-430

Abstract: We examine a type of lottery used to distribute some publicly held resource access rights. The lottery provides participants with the opportunity to choose among a set of simple gambles over multi-attribute goods. Participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning. When lottery winnings are multi-attribute goods, lottery outcomes provide sufficient information to estimate hedonic prices, marginal utility, and marginal rates of substitution among attributes. We develop a model for characterizing preferences from this information set. We apply our model to Idaho׳s Four Rivers Whitewater Recreation Lottery, which allows applicants to apply for one permit among a large set of alternative river/day combinations that provide varying river and weather characteristics. This lottery structure shows promise as a foundation for economic experiments for preference revelation.

Keywords: Lotteries; Complex goods; Hedonic pricing; Choice under uncertainty (search for similar items in EconPapers)
JEL-codes: D1 D49 D84 H42 Q26 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeeman:v:67:y:2014:i:3:p:412-430

DOI: 10.1016/j.jeem.2014.03.001

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Journal of Environmental Economics and Management is currently edited by M.A. Cole, A. Lange, D.J. Phaneuf, D. Popp, M.J. Roberts, M.D. Smith, C. Timmins, Q. Weninger and A.J. Yates

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