Decision-making in state lotteries: Half now or all of it later?

@article{citeulike:113718, abstract = {Many state lotteries offer players a choice between receiving roughly half of the jackpot immediately and receiving the entire jackpot over 25 annual payments. This requires players to make a decision that involves uncertainty, delay, and large amounts of real money. Archival data on lottery players\&\#039; jackpot payment decisions were collected from seven state and three multistate lotteries. Players\&\#039; jackpot payment preferences were assessed at the time of ticket purchase and after winning a jackpot. Preference for the annuity payment option significantly decreased as jackpot size increased, both at the time of ticket purchase and after winning. Furthermore, a significant proportion of winners who selected the annuity payment option at ticket purchase switched to the cash payment option after winning, whereas no winners switched from the cash to the annuity option after winning. These findings suggest that real-world choices involving large sums of money may be subject to diminishing marginal utility and probability and delay discounting.}, author = {Baker, F. and Johnson, M. W. and Bickel, W. K. }, citeulike-article-id = {113718}, issn = {1069-9384}, journal = {Psychonomic Bulletin and Review}, keywords = {discounting, human}, month = {December}, number = {4}, pages = {965--970}, posted-at = {2005-03-03 21:51:12}, priority = {2}, title = {Decision-making in state lotteries: Half now or all of it later?}, url = {http://www.ingentaconnect.com/content/psocpubs/pbr/2003/00000010/00000004/art00017}, volume = {10}, year = {2003} }

TY - JOUR ID - citeulike:113718 L3 - citeulike-article-id:113718 TI - Decision-making in state lotteries: Half now or all of it later? JF - Psychonomic Bulletin and Review VL - 10 IS - 4 SP - 965 EP - 970 SN - 1069-9384 N2 - Many state lotteries offer players a choice between receiving roughly half of the jackpot immediately and receiving the entire jackpot over 25 annual payments. This requires players to make a decision that involves uncertainty, delay, and large amounts of real money. Archival data on lottery players' jackpot payment decisions were collected from seven state and three multistate lotteries. Players' jackpot payment preferences were assessed at the time of ticket purchase and after winning a jackpot. Preference for the annuity payment option significantly decreased as jackpot size increased, both at the time of ticket purchase and after winning. Furthermore, a significant proportion of winners who selected the annuity payment option at ticket purchase switched to the cash payment option after winning, whereas no winners switched from the cash to the annuity option after winning. These findings suggest that real-world choices involving large sums of money may be subject to diminishing marginal utility and probability and delay discounting. KW - discounting KW - human AU - Baker, F AU - Johnson, MW AU - Bickel, WK PY - 2003/12/01/ UR - http://www.ingentaconnect.com/content/psocpubs/pbr/2003/00000010/00000004/art00017 ER -