Embedded Play: Economic and Social Motivations for Sharing Lottery Tickets

Abstract

We ask why people play the lottery in syndicates. Sharing lottery tickets with co-workers, friends or relatives may create agency problems related to opportunism in addition to the fact that playing the lottery in general is tantamount to buying an asset with negative expected value. Although it might be argued that people share lottery tickets in order to maximize their chances of winning a prize, it is also plausible that they engage in this practice to enact, cement or reproduce social ties and interpersonal trust. Using survey data on representative samples of the adult population in Spain and the United States, we adjudicate between these two hypotheses, and show that people play the lottery in syndicates primarily for social reasons.