...attractive men and scantily clad women frolicking in the mountains drinking beer, can understand the popular association of coolness and fun with these activities. That is, until you recall the image of your friend vomiting at a party or constantly reeking of smoke. The marketing of games of chance, such as lotteries and casino games, is very similar. It often focuses on psychological tendencies and weakness as well as misconceptions, such as the possibility of rising from one’s current socio-economic state, internal and external loci of control, and counterfactual thinking, to attract customers to their business. From an economists standpoint, the choice to gamble has historically been somewhat disconcerting. According to standard theory, people will almost always choose to pay a premium, like insurance, to eliminate uncertain future outcomes. Yet gamblers regularly seek out opportunities to participate in gambles where the odds are overwhelmingly against them. In his May 1981 paper in the Quarterly Journal of Economics, Bruck [1] evaluates a modified utility curve to explain the apparent inconsistency with economic theory. The figure below, copied from Brucks paper, illustrates graphically how a rational person can take such enormous gambles. Rather than following the traditional risk-averse model, where the utility curve has a log or square root-like shape, the cubic utility curve allows the individual to gain a higher utility, marked by Un, by taking a gamble with...
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...Proposal for “National Lottery” End-to-End Lottery Operation, Management and Consulting AAC Consulting 11-08-2014 Table of Contents Transmittal Letter Informative Abstract Confidentiality Statement Technical Proposal Business & Consulting Proposal Reference Page Anthony A. Clark President, AAC Consulting 101 Consultant Drive Lansing, MI 48911 November 4, 2014 John H. Doe Commissioner, National Lottery 101 Lottery Way Lansing, MI 48911 Dear Mr. Doe, I formally submit herewith a proposal in support of the award of a contractual business agreement between the National Lottery and AAC Consulting (“the Company”) wherein the Company provides technological infrastructure as...
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...Environment for Development Discussion Paper Series January 2014 EfD DP 14-01 A Review of Beijing’s Vehicle Lottery Short-Term Effects on Vehicle Growth, Congestion, and Fuel Consumption J un Y an g, Yi ng Li u, Pi ng Q i n, an d An tu ng A. Li u Environment for Development Centers Central America Research Program in Economics and Environment for Development in Central America Tropical Agricultural Research and Higher Education Center (CATIE) Email: centralamerica@efdinitiative.org Chile Research Nucleus on Environmental and Natural Resource Economics (NENRE) Universidad de Concepción Email: chile@efdinitiative.org China Environmental Economics Program in China (EEPC) Peking University Email: china@efdinitiative.org Ethiopia Environmental Economics Policy Forum for Ethiopia (EEPFE) Ethiopian Development Research Institute (EDRI/AAU) Email: ethiopia@efdinitiative.org Kenya Environment for Development Kenya University of Nairobi with Kenya Institute for Public Policy Research and Analysis (KIPPRA) Email: kenya@efdinitiative.org South Africa Environmental Economics Policy Research Unit (EPRU) University of Cape Town Email: southafrica@efdinitiative.org Tanzania Environment for Development Tanzania University of Dar es Salaam Email: tanzania@efdinitiative.org Sweden Environmental Economics Unit University of Gothenburg Email: info@efdinitiative.org USA (Washington, DC) Resources for the Future (RFF) Email: usa@efdintiative.org The Environment...
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...“The Lottery” “The Lottery” is a short story written by Shirley Jackson. The story is set in the small town of Bennington, Vermont and is a fictional dark tale about the dangers of blindly following tradition. There is symbolism in the story dealing with the objects involved, the event is held on the 27th of July every year. The black box and three legged stool along with the paper used to perform the event. Gathering of the stones and the use of the stones to complete the final part of the lottery ritual. The town square of Bennington, Vermont, between the towns Post Office and the Bank is where the town’s people would meet every June 27th for the event. Everything about the Lottery is tradition and ritual. The town children would start to gather first in the town square a little before 10 o’clock am, and then the men show up a few minutes after the children. The women of the town are the last to show up and they would begin talking with one another as they waited for Mr. Summers to arrive for the lottery to begin. “Soon the men begin to gather together, surveying their own children and speaking of planting crops, rain, tractors and taxes” (Jackson 290). “Soon the women by their husbands as they begin...
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... appropriately acknowledged, this assignment is my own work, has been expressed in my own words, and has not previously been submitted for assessment. 1 ASSESSMENT SHEET Student name: (to be completed by the examiner) COMMENTS Course name: Subject name: Assessor/marker: Principles learnt (for example, number and understanding of principles referred to, their influence on the structure of this paper, number and correct citations of references, use of...
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...4.12 4.13 ETHICS IN MARKETING RESEARCH: MINI-CASE STUDIES – courtesy of Mr. Hicks PART 1: Read the 4 mini-cases below. For TWO of the following 4 cases,answer the following questionson a separate sheet of paper: 1. What are the relevant Facts? 2. What are the ethical Issues? 3. Offer your opinion on what actions should be taken (at least 2-3 paragraphs) Case Study 1 Incredible Shrinking Potato Chip Package Topic: Cost vs. price vs. value issues Characters: Julie, Brand Manager for potato chips at a regional salty snacks manufacturer Dave, Marketing Director for the regional salty snacks manufacturer Julie has been concerned about the profitability of the various items in her line of potato chips. According to her potato suppliers, the recent drought caused a 35 percent reduction in the potato crop compared to one year ago, resulting in a 25 percent hike in potato prices to large buyers like Julie’s company. Potatoes accounted for almost all of the content of her chips (which also consisted of vegetable oil, one of three different flavoring spices, and salt), plus there were packaging costs. To hold the line on margins, which of late had been slim at only about 5 percent due to fierce competition from several other local and regional brands, Julie would need to raise potato chip prices about 15 percent. On her most popular 7.5 oz. size, which had a price spot of $1.59 on the package, this would require a price hike of $.24, bringing the price up to...
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...Donald Beauchesne Business Law Final Convenience Store I plan to open a convenience store, with gas station, when I finish with college. I have many years of experience managing and running a supermarket as well as a convenience store. I find a convenience store, as opposed to a supermarket, to be more of a personal business relationship with the customers. In time, you get to know the customers on a first name basis and this makes for a better consumer experience for the shopper as well as for me. A supermarket is too big and has too many functions and I found it hard to get to know the customers on a more personal level. This is something that I look for when being in a position of management. I plan to offer gas, lottery tickets, alchohol, food, and other everyday necessities at the store. In the town that I live in, there are no convenience stores or gas stations. To get gas, you must travel at least 20 minutes. I would like to offer this service in a town that desperately needs it. With all of these consumer expectations, come laws that will have be adhered to and licenses that must be purchased to be able to offer these goods. The first set of laws that I would have to be aware of and follow would deal with me employees. Knowing and following these laws will be in my best interest, and make a fair and safe environment to work in. The Equal Pay Act of 1963 states that I must pay women the same amount I would pay a man (www.shrm.org). Since the job requirements...
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...SWOT and Strategy Evaluation Paper Tonja Evans PHL/320 September 21, 2015 Steven Mersereau SWOT and Strategy Evaluation Paper Gambling in the United States along includes about 3,000 establishments and an annual revenue of a little less than $100,000. Worldwide, gambling generates over $450 billion in annual revenue, according to Global Betting and Gaming Consultants. Gambling industries includes casinos, state lotteries, bingo parlors, electronic betting arcades, electronic horse racing, online gambling and sports bookmakers. This industries includes casino operations of casino resorts and hotels as well. The demand for gambling is driven by consumer’s growth and state spending and profit depends on efficient operation and effective marketing. The competitive landscape of the industries in the United States is concentrated ad the top 50 companies account for about 60% which lead hotel casino more concentrated and about 90% of revenue out of the 50 companies. The Product, Operation and Technology is slot machines, table games, such as roulette, blackjack and poker (both table and video) in a place to play games of chance. The operation of casino involves gambling machines, training and supervising dealer and cashiers, entertaining customers, and managing cash. The industry attract and retain customers and some casino business to operate in hotel that can accommodate large numbers of guest such as Las Vegas, and Atlantic City. These hotels can house up to 6,000...
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...efficiency in competitive coordination games. This contrasts sharply with experimental findings from public goods and other coordination games, where communication enhances efficiency and often leads to socially optimal outcomes. JEL Classifications: C71, C72, C91, C92, D72, H41 Keywords: contest, between-group competition, within-group competition, cooperation, coordination, free-riding, experiments Corresponding author: Roman M. Sheremeta; E-mail: rshereme@purdue.edu * We thank Jordi Brandts, Subhasish Chowdhury, David Cooper, Anya Savikhin, seminar participants at Purdue University and participants at the June 2009 Economic Science Association meeting for helpful discussions and comments. We retain responsibility for any errors. This research has been supported by National Science...
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...Journal of Economic Behavior & Organization 72 (2009) 147–152 Contents lists available at ScienceDirect Journal of Economic Behavior & Organization journal homepage: www.elsevier.com/locate/jebo Cognitive abilities and behavioral biases Jörg Oechssler a,∗ , Andreas Roider a , Patrick W. Schmitz b a b Department of Economics, University of Heidelberg, Bergheimer Str. 58, 69115 Heidelberg, Germany Department of Economics, University of Cologne, Germany a r t i c l e i n f o a b s t r a c t We use a simple, three-item test for cognitive abilities to investigate whether established behavioral biases that play a prominent role in behavioral economics and finance are related to cognitive abilities. We find that higher test scores on the cognitive reflection test of Frederick [Frederick, S., 2005. Cognitive reflection and decision-making. Journal of Economic Perspectives 19, 25–42] indeed are correlated with lower incidences of the conjunction fallacy and conservatism in updating probabilities. Test scores are also significantly related to subjects’ time and risk preferences. Test scores have no influence on the amount of anchoring, although there is evidence of anchoring among all subjects. Even if incidences of most biases are lower for people with higher cognitive abilities, they still remain substantial. © 2009 Elsevier B.V. All rights reserved. Article history: Received 19 May 2008 Received in revised form 15 April 2009 Accepted 15 April 2009 Available online...
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...American Finance Association are collaborating with JSTOR to digitize, preserve and extend access to The Journal of Finance. http://www.jstor.org This content downloaded from 220.225.108.170 on Thu, 27 Jun 2013 05:36:00 AM All use subject to JSTOR Terms and Conditions THE JOURNAL OF FINANCE . VOL LXIV NO 4 . AUGUST 2009 Who Gambles in the Stock Market? ALOR KUMAR* ABSTRACT This related study At shows the that aggregate are cor to gamble and investment decisions propensity individual investors stocks with fea lottery prefer increases for lottery-type the demand stocks demand, during socioeconomic In the cross-section, factors that induce greater the level, tures, and like lottery economic downturns expenditure Further, ronments mance stocks similar in lotteries in lottery-type are associated with greater investment stocks in regions with envi investment levels are higher favorable lottery lottery stocks underperform, Because lottery-type gambling-related underperfor is greater investors low-income who excessively among overweight...
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...Is Compulsive Gambling as a Social Problem? Catherine Walker College Composition II Professor Eric Miller October 27, 2009 Is Compulsive Gambling a Social Problem? This paper explores the area of compulsive gambling and its effects upon American society. Compulsive gambling or pathological gambling has stagnated over the years, but has again become a silent stalker in that those who suffer from compulsive gambling suffer mostly in silence because of a perceived stigma that if you gamble you are a “loser”. The amount of money spent by Americans is astounding and compulsive gambling has become a major depressive disorder likely to occur in 76 percent of all compulsive gamblers (Unwin Davis, & Leeuw, 2000). As access to money become more limited, gamblers often resort to crime in order to pay debts, appease bookies, maintain appearances, and garner more money to gamble (Thompson, Gazel, & Rickman, 1996). The definition of compulsive gambling as it appears on the Mayo Clinic website is defined as an impulse-control disorder – a disorder in which you can’t resist a temptation or drive to perform an act that is harmful to you or someone else (http://www.mayoclinic.com/health/compulsive-gambling/DS00443). The National Opinion Research Center states that “Compulsive gambling is a problem in that it affects the whole of society at a phenomenal rate.” (NORC, 1999). The American Psychiatric Association (APA) defines pathological gambling as being unable to resist impulses...
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...irrelevance of history, magical thinking, quasimagical thinking, attention anomalies, the availability heuristic, culture and social contagion, and global culture. Theories of human behavior from psychology, sociology, and anthropology have helped motivate much recent empirical research on the behavior of financial markets. In this paper I will survey both some of the most significant theories (for empirical finance) in these other social sciences and the empirical finance literature itself. Particular attention will be paid to the implications of these theories for the efficient markets hypothesis in finance. This is the hypothesis that financial prices efficiently incorporate all public information and that prices can be regarded as optimal estimates of true investment value at all times. The efficient markets hypothesis in turn is based on more primitive notions that people behave rationally, or accurately maximize expected utility, and are able to process all available information. The idea behind the term “efficient markets hypothesis,” a term coined by Harry Roberts (1967),1 has a long history in financial research, a far longer history than the term itself has. The hypothesis (without the words This paper was prepared for John B. Taylor and Michael Woodford, Editors, Handbook of Macroeconomics. An earlier version was presented...
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... a r t i c l e i n f o a b s t r a c t Despite being a significant issue, there has been a lack of systematic reviews on gambling and problem gambling (PG) among the Chinese. Thus, this paper attempts to fill this theoretical gap. A literature search of social sciences databases (from 1840 to now) yielded 25 articles with a total sample of 12,848 Chinese community participants and 3397 clinical participants. The major findings were: (1) Social gambling is widespread among Chinese communities as it is a preferred form of entertainment. (2) Prevalence estimates for PG have increased over the years and currently ranged from 2.5% to 4.0%. (3) Chinese problem gamblers consistently have difficulty admitting their issue and seeking professional help for fear of losing respect. (4) Theories, assessments, and interventions developed in the West are currently used to explain and treat PG among the Chinese. There is an urgent need for theory-based interventions specifically tailored for Chinese problem gamblers. (5) Cultural differences exist in patterns of gambling when compared with Western samples; however, evidence is inconsistent. Methodological considerations in this area of research are highlighted and suggestions for further investigation are also included. (6) Much of gambling research has focused on identifying risk factors and at-risk individuals. It is essential to balance this knowledge with a focus on fundamental character strengths, which act as...
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...Expected Value and Consumer Choices Argosy University Abstract Consumers’ choices are prey to subtle discrepancies that arise in cognitive accounting and identifying how and when you are susceptible is an important step in improving the decision making process (Tvorik, 2014). This paper will consider why people value gains and losses differently in different circumstances by addressing what mental accounting is and how it impacts consumer decision making; and how a company can take advantage of their consumers’ mental accounting (Tvorik, 2014). This writer will also consider different scenarios from differing points of view; as a marketer and as a consumer. As a marketer, this writer will analyze how I would frame certain decisions to benefit from the disparities in my own cognitive accounting. As a consumer, I will address how to avoid the pitfalls posed by the inequalities of again, my own cognitive accounting (Tvorik, 2014). Mental accounting is a term that describes how people categorize and quantify economic outcomes (Thaler, 1980). This is similar to financial accounting in the way of using a system of debits and credits and affects how people spend and save their money, thus consumer decision-making. Mental accounting determines “when an individual chooses to act or postpone a purchase, how he or she perceives gains and losses, and how timing bears on the individual’s choices” in relation to the three mental buckets: current income, current wealth and future...
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