Moffitt, Steven D. and Ziemba, William T. (2017) Does it pay to buy the pot in the Canadian 6/49 Lotto: implications for lottery design. Systemic Risk Centre Discussion Papers (64). Systemic Risk Centre, The London School of Economics and Political Science, London, UK.
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Abstract
The Canadian 6/49 Lotto©, despite its unusual payout structure, is one of the few government sponsored lotteries that has the potential for a favourable strategy we call "buying the pot". By "buying the pot" we mean that a syndicate buys one of each ticket in the lottery, ensuring that it holds a jackpot winner. We assume that the other bettors independently buy small numbers of tickets. This paper presents (1) a formula for the syndicate's expected return, (2) conditions under which buying the pot produces a significant positive expected return, and (3) the implications of these findings for lottery design.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | https://www.systemicrisk.ac.uk/ |
| Additional Information: | © 2017 The Authors |
| Divisions: | Systemic Risk Centre |
| Subjects: | H Social Sciences > HB Economic Theory |
| JEL classification: | G - Financial Economics > G1 - General Financial Markets > G14 - Information and Market Efficiency; Event Studies D - Microeconomics > D4 - Market Structure and Pricing > D40 - General G - Financial Economics > G1 - General Financial Markets > G12 - Asset Pricing; Trading volume; Bond Interest Rates |
| Date Deposited: | 24 Mar 2017 16:28 |
| Last Modified: | 15 Sep 2023 23:41 |
| Projects: | ES/K002309/1 |
| Funders: | Economic and Social Research Council |
| URI: | http://eprints.lse.ac.uk/id/eprint/70755 |
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