Jacking Up the Jackpot: Are Lotto Consumers Fooled by Annuity Payments?
Victor Matheson () and
Kent R. Grote
Authors registered in the RePEc Author Service: Arevalo Flores Victor, Jr.
Public Finance Review, 2003, vol. 31, issue 5, 550-567
State lotteries typically pay lotto jackpot winners with annuity payments over a 20- to 30-year period. Because lottery associations advertise the jackpot to be the nominal sum of these payments, lottery associations can increase the size of the advertised jackpot simply by increasing the annuity length. Because ticket sales increase with the size of the advertised jackpot, longer annuity lengths should lead to higher ticket sales. The results suggest that lotto players are not fooled by this sleight of hand so that lottery associations cannot increase revenues by artificially inflating the advertised jackpot in this manner.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:31:y:2003:i:5:p:550-567
Access Statistics for this article
More articles in Public Finance Review
Bibliographic data for series maintained by SAGE Publications ().