Skip to main content

Optimal pricing of public lotteries and comparison of competing mechanisms

Buy Article:

$51.63 plus tax (Refund Policy)

Abstract:

This article establishes optimal pricing rules for rationing indivisible units of rival and otherwise nonexcludable goods by lottery or a hybrid of a lottery and outright sale by posted price. Given the distributional objective of maximizing expected consumer surplus, the solutions to unconstrained and constrained versions of the pricing problem may be expressed in classic inverse elasticity form, with the lottery price appearing as an entry fee, user fee or a combination of the two. Numerical analysis of a rich class of private value distributions indicates that sizable gains in expected consumer surplus can be realized over competitive pricing and zero pricing.

Keywords: D45; D61; H42; consumer surplus; lottery pricing; public lotteries; rationing

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036846.2014.925080

Affiliations: 1: School of Economics, Southwestern, University of Finance and Economics, Chengdu, Sichuan, 611130, China 2: Department of Economics, College of Business Administration, University of Central Florida, Orlando, FL, 32816-1400, USA

Publication date: September 12, 2014

More about this publication?
routledg/raef/2014/00000046/00000026/art00007
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more