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| Author: | Maeda, A. |
| Title: | Optimal lottery design for public financing |
| Journal: | Economic Journal
2008 : OCT, VOL. 118:532, p. 1698-1718 |
| Index terms: | lotteries optimization public finance |
| Language: | eng |
| Abstract: | A model of optimal lottery design for public financing is developed here on the assumption that economic agents view buying lottery tickets as a form of entertainment. Two findings, given that lotteries are optimally designed, are given: 1) the fundraising potential of a lottery is independent of its type (specifically, of whether it is a fixed-prize type or a pari mutuel) and 2) the ratio of the optimal winning prize amount in each prize class to total lottery is equalised to the elasticity of demand for lottery ticket purchases with respect to the winning prize in each prize class. |
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