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A Theory of Demand for Gambles
Nyman, John A. (Center for Economic Research, Department of Economics, University of Minnesota, 2004)
 

Title 
A Theory of Demand for Gambles

Author(s)

Issue Date
2004-09

Publisher
Center for Economic Research, Department of Economics, University of Minnesota

Type
Working Paper

Abstract
Although gambling is primarily an economic activity, no single theory of the demand for gambles has gained wide-spread acceptance among economists. This paper proposes a simple model of the demand for gambling that is based on the standard economic assumptions that (1) resources are scarce and (2) consumer's utility increases with income at a decreasing rate. This model has the advantages that (1) it is based solely on changes in income, (2) is potentially applicable to most consumers, (3) preserves the assumption of diminishing marginal utility of income, (4) is consistent with the insurance-buying gambler, and (5) has intuitive appeal.

Keyword(s)

Appears in Collection(s)

Series/Report Number
Discussion Paper
322

Suggested Citation
Nyman, John A.. (2004). A Theory of Demand for Gambles. Center for Economic Research, Department of Economics, University of Minnesota. Retrieved from the University of Minnesota Digital Conservancy, http://purl.umn.edu/55890.


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