Testing for rational expectations in the UK National Lottery
Authors: Forrest, David; Gulley, O. David; Simmons, Robert
Source: Applied Economics, Volume 32, Number 3, 20 February 2000 , pp. 315-326(12)
Abstract:The concept of rational expectations has typically been assumed, without testing, in the analysis of consumer demand and market efficiency in betting markets, including betting on lottery games. Lottery games offer an excellent opportunity to test how participants process the information that is available to them. Using the UK National Lottery as our particular case, we find that participants, in general, efficiently process available information. Specifically, they act as if they can, on average, forecast the level of sales for a given drawing.
Document Type: Research Article
Publication date: February 20, 2000