Abstract
We investigate the optimal number of tickets an expected-utility-maximizing individual who participate in a lottery will buy. We show that the expected utility is not always unimodal in the number of tickets. We also show that a risk-averse individual will not buy more than one ticket. (S)he will be willing to own a share in several tickets only if that share is sufficiently small.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 69-71 |
| Number of pages | 3 |
| Journal | Operations Research Letters |
| Volume | 6 |
| Issue number | 2 |
| DOIs | |
| State | Published - May 1987 |
Bibliographical note
Funding Information:* We are grateful to a referee for helpful comments. Research ~,as supported by the Natural Sciences and Engineering Research Council of Canada through Grant A5698.
Keywords
- expected utility
- lottery