On the design of lottery games

R. Hartley; G. Lanot

doi:10.1057/palgrave.jors.2601484

On the design of lottery games

R. Hartley, G. Lanot

Economics

Research output: Contribution to journal › Article › peer-review

Abstract

We describe a model of participation in lottery games designed to address the optimisation of tax revenue in state-sponsored lotteries. The model treats participants dynamically and examines a long-run equilibrium. A novel high frequency approximation is used to turn the problem into a static, state-contingent deterministic programming problem. We demonstrate that the solution of this problem has qualitatively plausible properties and then calibrate the model against the United Kingdom National Lottery (UKNL). The results suggest that the current design of the UKNL may not be maximising tax revenue.

Original language	English
Pages (from-to)	89-100
Number of pages	11
Journal	Journal of the Operational Research Society
Volume	54
Issue number	1
DOIs	https://doi.org/10.1057/palgrave.jors.2601484
Publication status	Published - Jan 2003

Keywords

Dynamic optimisation
Lottery
Simulations

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10.1057/palgrave.jors.2601484

Cite this

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abstract = "We describe a model of participation in lottery games designed to address the optimisation of tax revenue in state-sponsored lotteries. The model treats participants dynamically and examines a long-run equilibrium. A novel high frequency approximation is used to turn the problem into a static, state-contingent deterministic programming problem. We demonstrate that the solution of this problem has qualitatively plausible properties and then calibrate the model against the United Kingdom National Lottery (UKNL). The results suggest that the current design of the UKNL may not be maximising tax revenue.",

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KW - Simulations

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On the design of lottery games

Abstract

Keywords

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