Optimal lottery (Q478108): Difference between revisions
From MaRDI portal
Latest revision as of 10:05, 9 July 2024
scientific article
Language | Label | Description | Also known as |
---|---|---|---|
English | Optimal lottery |
scientific article |
Statements
Optimal lottery (English)
0 references
3 December 2014
0 references
Lotteries are considered that belong to the set of Pareto equilibria between a firm and a consumer with rank-dependent utility (RDU). It is shown that the continuity of the lotteries is necessary for their compatibility with RDU, and that under realistic assumptions the optimal prize structure follows a power law distribution. The theoretical results are discussed in the context of real lotteries.
0 references
lotteries
0 references
rational decision theory
0 references
firm behavior
0 references
0 references