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Cognitive Imprecision and Small-Stakes Risk Aversion
Khaw, Mel Win - 2018
Observed choices between risky lotteries are difficult to reconcile with expected utility maximization, both because subjects appear to be too risk averse with regard to small gambles for this to be explained by diminishing marginal utility of wealth, as stressed by Rabin (2000), and because...
Persistent link: https://www.econbiz.de/10012480631
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Making Savers Winners : An Overview of Prize-Linked Savings Products
Kearney, Melissa Schettini - 2010
For over three centuries and throughout the globe, people have enthusiastically bought savings products that incorporate lottery elements. In lieu of paying traditional interest to all investors proportional to their balances, these Prize Linked Savings (PLS) accounts distribute periodic...
Persistent link: https://www.econbiz.de/10012462223
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Willingness to Accept, Willingness to Pay, and Loss Aversion
Chapman, Jonathan; Dean, Mark; Ortoleva, Pietro; … - National Bureau of Economic Research - 2023
We use four incentivized representative surveys to study the endowment effect for lotteries in 4,000 U.S. adults. We replicate the standard finding of an endowment effect--the divergence between Willingness to Accept (WTA) and Willingness to Pay (WTP), but document three new findings. First, we...
Persistent link: https://www.econbiz.de/10013537730
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Using Lotteries to Attract Deposits
Gertler, Paul J.; Higgins, Sean; Scott, Aisling; Seira, … - National Bureau of Economic Research - 2023
Despite the importance of deposit financing for lending, banks in developing countries struggle to attract deposits. In a randomized experiment across 110 bank branches throughout Mexico, a lottery incentive based on net monthly deposits caused a 40% increase in the number of accounts opened and...
Persistent link: https://www.econbiz.de/10014337763
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Estimating the Effect of Unearned Income on Labor Supply, Earnings, Savings, and Consumption : Evidence from a Survey of Lottery Players
Imbens, Guido W. - 1999
Knowledge of the effect of unearned income on economic behavior of individuals in general, and on labor supply in particular, is of great importance to policy makers. Estimation of income effects, however, is a difficult problem because income is not randomly assigned and exogenous changes in...
Persistent link: https://www.econbiz.de/10012471799
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Spatial Competition and Cross-border Shopping : Evidence from State Lotteries
Knight, Brian G. - 2010
This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. We first develop a simple theoretical model in which consumers choose between state lotteries and face a trade-off between travel costs and the price of a fair gamble,...
Persistent link: https://www.econbiz.de/10012462939
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The Own and Social Effects of an Unexpected Income Shock : Evidence from the Dutch Postcode Lottery
Kuhn, Peter J. - 2008
In the Dutch Postcode Lottery a postal code (19 households on average) is randomly selected weekly, and prizes - consisting of cash and a new BMW - are awarded to lottery participants living in that postal code. On average, this generates a temporary, unexpected income shock equal to about eight...
Persistent link: https://www.econbiz.de/10012464612
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State Lotteries and Consumer Behavior
Kearney, Melissa Schettini - 2002
lotteries primarily crowd out other forms of gambling, or do they crowd out non-gambling consumption? Second, does consumer … misinformed about the risks and returns of lottery gambles? Analyses of multiple sources of micro-level gambling data demonstrate … that lottery spending does not substitute for other forms of gambling. Household consumption data suggest that household …
Persistent link: https://www.econbiz.de/10012469376
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Consumption : Beyond Certainty Equivalence
Blanchard, Olivier J. - 1988
This paper discusses the recent research on the consumption function that has attempted to relax the assumption of certainty equivalence. While there remain many open questions, both theoretical and empirical, it is clear that the assumption of certainty equivalence can be misleading. Under more...
Persistent link: https://www.econbiz.de/10012476571
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How do People Respond to Small Probability Events with Large, Negative Consequences?
Eichenbaum, Martin S. - 2020
We study how people react to small probability events with large negative consequences using the outbreak of the COVID-19 epidemic as a natural experiment. Our analysis is based on a unique administrative data set with anonymized monthly expenditures at the individual level. We find that older...
Persistent link: https://www.econbiz.de/10012482208