Reducing ambiguity in lotteries: evidence from a field experiment

Julian Conrads, Tommaso Reggiani () and Rainer Rilke

Applied Economics Letters, 2016, vol. 23, issue 3, 206-211

Abstract: Ambiguity about the chances of winning represents a key aspect in lotteries. By means of a controlled field experiment, we exogenously vary the degree of ambiguity about the winning chances of lotteries organized to incentivize the contribution for a public good. In one treatment, people have been simply informed about the maximum number of potential participants (i.e. the number of lottery tickets released). In a second treatment, this information has been omitted as in all traditional lotteries. Our general finding shows that simply reducing the degree of ambiguity of the lottery leads to a sizable and significant increase (67%) in the participation rate. This result is robust to alternative prize configurations.

Date: 2016
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DOI: 10.1080/13504851.2015.1066480

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