Lottery "strategies": monetizing players' behavioral biases

Raman Kachurka and Michał Wiktor Krawczyk ()
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Michał Wiktor Krawczyk: Faculty of Economic Sciences, University of Warsaw

No 2020-29, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: The popularity of lotteries around the world is puzzling. In this paper, we study one factor, which might contribute to this phenomenon, namely lottery “strategies” that could allegedly improve players’ odds. In an online survey of lottery players we find that such strategies are popular and their use is related to more frequent lottery play and a number of personality traits and beliefs about gambling. Systematically searching for websites and books, we amass the largest dataset of lottery strategies in existence. We subsequently analyze their descriptions, categorize them, and investigate how they exploit their target audience’s behavioral biases, including the illusion of control, authority bias, magical thinking, the illusion of correlation, gambler’s fallacy, hot hand fallacy, representativeness heuristic, availability heuristic, and regret aversion. We find that the strategies maintain gamblers’ (false) beliefs about the possibility of controlling lottery results. This exploratory work contributes to a deeper understanding of (problem) gambling and lays the foundation for the design of experiments testing how the specific features of different strategies may interact with beliefs and trigger (excessive) lottery play.

Keywords: decision making under risk; lottery strategy; illusion of control (search for similar items in EconPapers)
JEL-codes: C91 D01 D81 D83 D91 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2020
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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https://www.wne.uw.edu.pl/index.php/download_file/5802/ First version, 2020 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2020-29

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