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Explaining the favorite-longshot bias : is it risk-love or misperceptions?

Snowberg, Eric; Wolfers, Justin - 2010

The favorite-longshot bias describes the longstanding empirical regularity that betting odds provide biased estimates of the probability of a horse winning - longshots are overbet, while favorites are underbet. Neoclassical explanations of this phenomenon focus on rational gamblers who overbet...

Persistent link: https://www.econbiz.de/10003965888

Equity and effectiveness of optimal taxation in contests under an all-pay auction

Mealem, Yosef; Nitsan, Shemuʾel - 2012

The means of contest design may include differential taxation of the prize. This paper establishes that, given a revenue-maximizing contest designer who faces a balanced-budget constraint, the optimal taxation scheme corresponding to an all-pay auction is appealing in two senses. First, it...

Persistent link: https://www.econbiz.de/10009488961

Consuming your way to efficiency : public goods provision through non-distortionary tax lotteries

Giebe, Thomas; Schweinzer, Paul - 2013

We revisit the classical result that financing a pure public good through taxation of private consumption is inefficient. To this standard setup we add a consumption contest in which consumers can win a prize. We show that an appropriately chosen contest - which we call a 'tax lottery' - can...

Persistent link: https://www.econbiz.de/10009742905

Gambling to leapfrog in status?

Friehe, Tim; Mechtel, Mario - 2013

This paper shows that households with positional concerns and convex status utility use gambling to attempt … results strongly indicate that households who care about status are more likely to participate in gambling and invest more in … gambling, while they save less. In addition, results regarding socio-economic and demographic characteristics are reported. For …

Persistent link: https://www.econbiz.de/10009724024

On the efficient provision of public goods by means of lotteries

Franke, Jörg; Leininger, Wolfgang - 2013

We provide a solution to the free-rider problem in the provision of a public good. To this end we define a biased indirect contribution game which provides the efficient amount of the public good in non-cooperative Nash equilibrium. No confiscatory taxes or other means of coercion are used. We...

Persistent link: https://www.econbiz.de/10009706153

Lattices and lotteries in apportioning risk

Schlesinger, Harris - 2014

Although risk aversion has been used in economic models for over 275 years, the past few decades have shown how higher order risk attitudes are also quite important. A behavioral approach to defining such risk attitudes was developed by Eeckhoudt and Schlesinger (2006), based upon simple lottery...

Persistent link: https://www.econbiz.de/10010431278

Conflicts with multiple battlefields

Kovenock, Daniel J.; Roberson, Brian - 2010

This paper examines conflicts in which performance is measured by the players' success or failure in multiple component conflicts, commonly termed "battlefields". In multi-battlefield conflicts, behavioral linkages across battlefields depend both on the technologies of conflict within each...

Persistent link: https://www.econbiz.de/10008696768

Differential prize taxation and structural discrimination in contests

Mealem, Yosef; Nitsan, Shemuʾel - 2012

This paper evaluates differential prize taxation and structural discrimination as a means of increasing efforts in the most widely studied contests. We establish that a designer who maximizes efforts subject to a balanced-budget constraint prefers dual discrimination, namely, change of the...

Persistent link: https://www.econbiz.de/10009540773

Generalizations of the General Lotto and Colonel Blotto games

Kovenock, Daniel J.; Roberson, Brian - 2015

In this paper, we generalize the General Lotto game and the Colonel Blotto game to allow for battlefield valuations that are heterogeneous across battlefields and asymmetric across players, and for the players to have asymmetric resource constraints. We completely characterize Nash equilibrium...

Persistent link: https://www.econbiz.de/10010503467

Risk aversion and the subjective time discount rate : a joint approach

Praag, Bernard M. S. van; Booij, Adam S. - 2003

In this paper we analyze a large sample of individual responses to six lottery questions. We derive a simultaneous estimate of risk aversion and the time preference discount rate per individual. This can be done because the consumption of a large prize is smoothed over a larger time period. It...

Persistent link: https://www.econbiz.de/10011507761