Reference Dependence and Lottery Participation

Robertas Zubrickas

doi:10.1111/ecin.70054

Reference Dependence and Lottery Participation

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Abstract

We assume that lottery participants are poor relative to their target income. Reference dependence with loss aversion can render the marginal utility of income non-monotonic in line with the Friedman–Savage hypothesis. As a result, lottery participation can be rationalized without invoking probability weighting. The theoretical implications align with recent empirical evidence on lottery spending.

Original language	English
Journal	Economic Inquiry
Early online date	28 Mar 2026
DOIs	https://doi.org/10.1111/ecin.70054
Publication status	E-pub ahead of print - 28 Mar 2026

Data Availability Statement

Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.

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10.1111/ecin.70054Licence: CC BY

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Reference Dependence and Lottery Participation

Abstract

Data Availability Statement

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