Margin of luck and value of information in lottery purchases in Thailand
This paper investigates the rationality behind the superstitious behavior of Thai lottery gamblers who search for a lucky number in hopes to win the Last Two Digits Prize. It also finds whether the historical statistics from the previous 25 years of lottery draws can help to develop a winning strategy. As the findings show, some lottery numbers have certainly been drawn more than once for the Last Two Digits Prize in every 30 lottery rounds. It seems to be that having this statistical knowledge significantly increases the chance to win when considering the full range of prizes. However, given that the expected return is illusive, playing the lottery having this prior knowledge may turn out to be a loss. Evidently, statistics does not contribute to winning. The only way to win is to know at least one exact number of the two-digits combination that will win the Last Two Digits Prize. This knowledge, drawn on superstitious sources, certainly leads to a net gain in the lottery investment. The study concludes that the winning strategy exists but requires the number superstition which is beyond randomness. Therefore, the search behavior of Thai lottery gamblers who hold a belief in the number superstition is rational; it makes the lottery investment profitable in case the lucky number wins. Additionally, to cover the search cost, the lottery buyer needs to buy a set of multiple tickets with the same number in order to win higher prize money.
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