Sunday, September 01, 2013

How to Maximize Lottery Revenue

As a proponent of the idea that people are oriented towards their relative success, not absolute wealth, I think this lottery idea is fiendishly clever.  Here's a description from TheWeek of a clever way to capitalize on this instinct:
A salient example is the "Postcode Lottery" in the Netherlands. Weekly it awards a "Street Prize" to one postal code, the Dutch equivalent of a zip code, chosen at random. When a postal code (usually about 25 houses on a street) is drawn, everybody who played the lottery in that code wins about $12,500 or more. Those living there who neglected to buy a ticket win nothing — except the chance to watch their neighbors celebrate. 
In a 2003 study, researchers in the Netherlands noted that fear of regret played a significantly larger role in the Postcode Lottery than in a regular lottery. It was not the chance of winning that drove the players to buy tickets, the researchers found, it was the idea that they might be forced to sit on the sidelines contemplating missed opportunity. 


  1. I'm from the Netherlands. I agree with this post on the notion of regret regarding the "Postcode Lottery". As a matter of fact, I'm not participating in this lottery, so this blog reminded me of the risk I'm taking...
    In 2007 a coupled sued the Postcode lottery for 'emotional damage'. They lost their case:

  2. Anonymous4:41 PM

    Eric, off topic but any comments on this...

  3. great quafafew paper. Thanks.

  4. "that they might be forced to sit on the sidelines contemplating missed opportunity."

    this hits home more so.. great post Eric!