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What floats your boat? Preference revelation from lotteries over complex goods

Author

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  • Yoder, Jonathan K.
  • Ohler, Adrienne M.
  • Chouinard, Hayley H.
Abstract
We examine a type of lottery used to distribute some publicly held resource access rights. The lottery provides participants with the opportunity to choose among a set of simple gambles over multi-attribute goods. Participant choices result in an endogenous distribution of success rates over gambles that reflects tradeoffs between the relative desirability of the available goods and the probability of winning. When lottery winnings are multi-attribute goods, lottery outcomes provide sufficient information to estimate hedonic prices, marginal utility, and marginal rates of substitution among attributes. We develop a model for characterizing preferences from this information set. We apply our model to Idaho׳s Four Rivers Whitewater Recreation Lottery, which allows applicants to apply for one permit among a large set of alternative river/day combinations that provide varying river and weather characteristics. This lottery structure shows promise as a foundation for economic experiments for preference revelation.

Suggested Citation

  • Yoder, Jonathan K. & Ohler, Adrienne M. & Chouinard, Hayley H., 2014. "What floats your boat? Preference revelation from lotteries over complex goods," Journal of Environmental Economics and Management, Elsevier, vol. 67(3), pages 412-430.
    • Handle: RePEc:eee:jeeman:v:67:y:2014:i:3:p:412-430
    DOI: 10.1016/j.jeem.2014.03.001
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    More about this item

    Keywords

    Lotteries; Complex goods; Hedonic pricing; Choice under uncertainty;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D49 - Microeconomics - - Market Structure, Pricing, and Design - - - Other
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • Q26 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Recreational Aspects of Natural Resources

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