Do risk-averse lottery players become risk-seeking lottery winners?
Papachristou, George
Kyritsis, Ioannis
Models of rational lottery play assume that lottery winners are risk-seekers. Models of skewness preference are not an exception to this. Skewness preference is not, in general, sufficient to make risk-averse individuals play, if one does not assume a risk-seeking attitude at windfall gains. In light of the anecdotal evidence on lottery winners remaining risk-averse, we fear that a consistent theory of rational betting may only have a limited domain of application: that of lottery losers.
