Testing for rational expectations in the UK National Lottery |
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Authors: | David Forrest O David Gulley Robert Simmons |
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Institution: | Facultad de Economia, Universidad Autonoma de Nuevo Leon, Loma Redonda 1515 Pte., Col. Loma Larga, Monterrey, Nuevo Leon, México, CP 64710 E-mail: rguajard@ccr.dsi.uanl.mx and homeroangel@mexico.com |
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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. |
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