The aim of this paper is to propose a model of decision-making for lotteries. Lottery qualities are the key concepts of the theory. Qualities allow the derivation of optimal decision-making processes and are taken explicitly into account for lottery evaluation. Our contribution explains the major violations of the expected utility theory for decisions on two-point lotteries and shows the necess...

We consider reasoning about prefactual possibilities in the future, for example, "if I were to win the lottery next year I would buy a yacht" and counterfactual possibilities, for example, "if I had won the lottery last year, I would have bought a yacht." People may reason about indicative conditionals, for example, "if I won the lottery I bought a yacht" by keeping in mind a few true possibili...

This paper investigates the causal impact of large unexpected windfalls on individual mental health, physical health, as well as health behaviors. I use a large individual-level panel data set of lottery winners from Germany between the years 2000 and 2011 and observe lottery winners before and after winning a large lottery prize. Mental health declines immediately after winning a large lottery...

We propose a simplified logic for reasoning about (multi-agent) epistemic probability models, and for epistemic probabilistic model checking. Epistemic probability models are multi-agent Kripke models that assign to each agent an equivalence relation on worlds, together with a function from worlds to positive rationals (a lottery). The difference with the usual approach is that probability is l...

We investigate the empirical validity of two hypotheses, duplex decomposition (DD) and general segregation (GS), regarding decomposition of a binary gamble of a gain and a loss into two unitary gambles in which one consequence of each gamble is no change from the status quo. Four binary lotteries (money gambles with specified probabilities) and four decomposed lotteries designed to test GS and ...

Aa.tr8ct. A penon is said to prefer in the stochastic dominance sense one lottery-over-outcomes over another lottery-over-outcomes if the probability of his (at least) fIrst choice being selected in the fIrst lottery is greater than or equal to the analogous probability in the ~nd lottery, the probability of his at least second choice being selected in the first lottery is greater than or equal...

We examine the validity of a new system of taxation called lottery receipts in China theoretically and empirically. Tax collection is difficult as the Chinese government difficultly monitors the actual economic dealings. To bring out the private information on transaction known only to a seller and a buyer, the government has set up a lottery receipt system which has been tried out in many area...