Hubris is a tendency of leaders to hold an overly confident view of their own capabilities and to abuse power for their own selfish goals, sometimes with disastrous consequences for organizations. A ...major reason for hubris is the rigorous selection process leaders typically undergo. This study proposes a governance mechanism used successfully in history to tackle hubris: partly random selections, which combine competitive selections by competence with lotteries. A frequently voiced concern about the use of lotteries is that it takes no account of the competence of the leader chosen. We propose that partly random selections can mitigate the disadvantages of both competitive selections alone and lotteries alone and reduce hubris in leaders. We conduct a test of this governance mechanism by means of a computerized laboratory experiment. Our results show that partly random selections significantly reduce the hubris of group leaders.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Most U.S. states earn significant amount of revenues from lottery sales. However, they are also criticized for promoting the lotteries because they have been seen as taking advantage of poor ...populations. The purpose of this study is to identify the impact of various economic factors on lottery sales by using zip-code level sales within the state of Maine. The results show that an increase of 1% in unemployment rate results in a 0.38% increase in draw lottery sales, but it has no significant impact on instant lottery sales. This highlights the importance of differentiating between two major types of lotteries.
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BFBNIB, IZUM, KILJ, NUK, PILJ, SAZU, UL, UM, UPUK
Problem lottery gambling among lottery consumers has increased globally over the years, rendering it necessary to explore their financial literacy characteristics and to answer whether financial ...literacy inhibits problem lottery gambling. In the present research, a total of 316 Chinese lottery consumers, who constitute the culturally underrepresented samples in the extant literature, completed a survey about financial literacy and problem lottery gambling. Using the propensity score matching method, we compared financial literacy between Chinese lottery consumers and Chinese general population (N = 10,058). The results showed that the five facets of financial literacy (i.e., financial knowledge, financial capacity, financial management values, financial ethics, and wealth values) among Chinese lottery consumers were significantly lower than Chinese general population. Among Chinese lottery consumers, their Homo sociologicus index (including financial ethics and wealth values) negatively predicted problem lottery gambling, but the Homo economicus index (including financial knowledge, financial capacity, and financial management values) was not significantly associated with problem lottery gambling. The theoretical and practical implications of these findings were discussed.
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EMUNI, FIS, FZAB, GEOZS, GIS, IJS, IMTLJ, KILJ, KISLJ, MFDPS, NLZOH, NUK, OBVAL, OILJ, PNG, SAZU, SBCE, SBJE, SBMB, SBNM, UKNU, UL, UM, UPUK, VKSCE, ZAGLJ
Using the Spanish Christmas lottery as a natural experiment, the impact of geographically clustered lottery winnings on consumer sentiment and intended durable consumption is analyzed. Albeit not ...receiving lottery prizes, consumers in winning provinces become significantly more optimistic about the Spanish macroeconomic conditions than those living elsewhere. This variation in sentiment is shown to be orthogonal to changes in regional fundamentals and leads to a rise in spending intentions. Young, less educated, low-income, and unemployed individuals react stronger to the lottery shock. At the regional level, lottery wins significantly increase car licenses, reduce unemployment, and intensify job creation and prices.
•We study the effects of geographically clustered prizes with Spanish Christmas lottery data.•Lottery winnings stimulate economic activity, and their propagation works through sentiment.•Lottery winnings increase car purchase growth, reduce unemployment and increase moderately CPI prices.•Albeit not receiving prizes, consumers become optimistic and increase their intended consumption.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
This paper studies the adoption and impact of prize-linked savings (PLS) accounts, which offer lottery-like payouts to individual account holders in lieu of interest. Using microlevel data from a ...bank in South Africa, we show that PLS is attractive to a broad group of individuals, with financially constrained individuals and those with no other deposit accounts particularly likely to participate. Individuals who choose to use PLS increase their total savings on average by 1% of annual income. Exploiting the random assignment of prizes, we present causal evidence that PLS substitutes for lottery gambling but is a complement to standard savings.
This paper was accepted by Tyler Shumway, finance.
WEALTH, HEALTH, AND CHILD DEVELOPMENT Cesarini, David; Lindqvist, Erik; Östling, Robert ...
The Quarterly journal of economics,
05/2016, Volume:
131, Issue:
2
Journal Article
Peer reviewed
Open access
We use administrative data on Swedish lottery players to estimate the causal impact of substantial wealth shocks on players’ own health and their children’s health and developmental outcomes. Our ...estimation sample is large, virtually free of attrition, and allows us to control for the factors conditional on which the prizes were randomly assigned. In adults, we find no evidence that wealth impacts mortality or health care utilization, with the possible exception of a small reduction in the consumption of mental health drugs. Our estimates allow us to rule out effects on 10-year mortality one sixth as large as the cross-sectional wealth-mortality gradient. In our intergenerational analyses, we find that wealth increases children’s health care utilization in the years following the lottery and may also reduce obesity risk. The effects on most other child outcomes, including drug consumption, scholastic performance, and skills, can usually be bounded to a tight interval around zero. Overall, our findings suggest that in affluent countries with extensive social safety nets, causal effects of wealth are not a major source of the wealth-mortality gradients, nor of the observed relationships between child developmental outcomes and household income.
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A centralized lottery system overseen by state health departments should be used to allocate COVID-19 drugs that are in short supply. This lottery system must be randomized to promote fairness and ...provide an opportunity to generate scientific knowledge.
In this letter we illustrate that the representative Cumulative Prospect Decision Maker when choosing between lotteries with three payoffs that exhibit the same probabilities of payoffs and expected ...return and variance can exhibit either skew preference or non-skew preference and consequently explain the conflicting experimental result reported in the literature.
•CPT DM may show either skew or non-skew preference in three-outcome lottery choices.•Conflicting experimental results on skew preference are reconciled.•Demonstration employs lottery choices with identical expected return and variance.•This paper reinterprets CPT DM’s skewness preference.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Previous empirical studies find that lottery-like stocks significantly underperform their non-lottery-like counterparts. Using five different measures of the lottery features in the literature, we ...document that the anomalies associated with these measures are state dependent: the evidence supporting these anomalies is strong and robust among stocks where investors have lost money, whereas among stocks where investors have gained profits, the evidence is either weak or even reversed. Several potential explanations for such empirical findings are examined, and we document support for the explanation based on reference-dependent preferences. Our results provide a unified framework to understand the lottery-related anomalies in the literature.
This paper was accepted by Tyler Shumway, finance.
Abstract
If we can save the lives of only one of multiple groups of people, we might be inclined simply to save whichever group is largest. We may worry, though, that automatically saving the largest ...group fails to take each saveable individual sufficiently into account, offering some of these individuals no chance at all of being rescued. Still wanting to give larger groups higher chances of survival, we may then say that we ought to employ a proportionally weighted lottery to determine which group to save. In this paper, I argue that this would be a mistake. Given the most plausible way of specifying it, the weighted-lottery view itself fails to treat each saveable individual with equal moral respect.
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