Working Papers

The WNE Working Papers series has been published by the Faculty of Economic Sciences at the University of Warsaw since 2008.

The WNE Working Papers series provides a fast, open channel for disseminating research conducted at the Faculty of Economic Sciences, University of Warsaw. The papers hosted here are working versions (pre-prints) and may evolve as authors refine their analyses, incorporate feedback, or progress through formal peer-review. What you read is the current version released by the authors, timestamped and assigned DOI/ISSN identifiers to ensure precise citation and version tracking. Copyright remains with the authors, who may, at any time, upload a revised file or add a note directing readers to a later, peer-reviewed publication.

The Working Papers series accepts articles by research employees of the Faculty and publications from conferences organised at the Faculty of Economic Sciences at the University of Warsaw. Articles should be original research papers which have not been previously published, on the subject of economics.

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Number of Results 6

WP(24/2021)372. Stability of the Representativeness Heuristic: Further Evidence from Choices Between Lottery Tickets

Authors: Krawczyk Michał, Rachubik Joanna
The representativeness heuristic (RH) proposes that people expect even a small sample to have similar characteristics to its parent population. One domain in which it appears to operate is the preference for combinations of numbers on lottery tickets…

WP372. Stability of the Representativeness Heuristic: Further Evidence from Choices Between Lottery Tickets

The representativeness heuristic (RH) proposes that people expect even a small sample to have similar characteristics to its parent population. One domain in which it appears to operate is the preference for combinations of numbers on lottery tickets: most players seem to avoid very characteristic, “unrepresentative” combinations, e.g., only containing very low numbers. Likewise, many players may avoid betting on a recently drawn combination because it would seem particularly improbable to be drawn again. We confirm both of these tendencies in a lab experiment and corroborate their external validity in two field experiments. However, we only find a weak link between these two choices: the same people do not necessarily exhibit the two biases. In this sense, there is little consistent manifestation of the RH across different tasks at the individual level. Nevertheless, there are some links related to rationality across the two choices – people who are willing to forgo a monetary payment to get the preferred ticket in one task are also willing to do it in the other. We find such preferences to be related to the misperception of probabilities and providing intuitive, incorrect answers in the Cognitive Reflection Test.


Krawczyk Michał, Rachubik Joanna
Decision making under risk Lottery choice Perception of randomness Number preferences in lotteries Representativeness heuristic

WP(29/2020)335. Lottery "strategies": monetizing players' behavioral biases

Authors: Kachurka Raman, Krawczyk Michał
The popularity of lotteries around the world is puzzling. In this paper, we study one factor, which might contribute to this phenomenon, namely lottery "strategies" that could allegedly improve players' odds. In an online survey of lott…

WP335. Lottery "strategies": monetizing players' behavioral biases

The popularity of lotteries around the world is puzzling. In this paper, we study one factor, which might contribute to this phenomenon, namely lottery "strategies" that could allegedly improve players' odds. In an online survey of lottery players we find that such strategies are popular and their use is related to more frequent lottery play and a number of personality traits and beliefs about gambling. Systematically searching for websites and books, we amass the largest dataset of lottery strategies in existence. We subsequently analyze their descriptions, categorize them, and investigate how they exploit their target audience's behavioral biases, including the illusion of control, authority bias, magical thinking, the illusion of correlation, gambler's fallacy, hot hand fallacy, representativeness heuristic, availability heuristic, and regret aversion. We find that the strategies maintain gamblers' (false) beliefs about the possibility of controlling lottery results. This exploratory work contributes to a deeper understanding of (problem) gambling and lays the foundation for the design of experiments testing how the specific features of different strategies may interact with beliefs and trigger (excessive) lottery play.


Kachurka Raman, Krawczyk Michał
decision making under risk lottery strategy illusion of control

WP(3/2020)309. What do lab experiments tell us about the real world? The case of lotteries with extreme payoffs

Authors: Kachurka Roman, Krawczyk Michał, Rachubik Joanna
In this study, we conduct a laboratory experiment in which the subjects make choices between real-world lottery tickets typically purchased by lottery customers. In this way, we are able to reliably offer extremely high potential payoffs, something r…

WP309. What do lab experiments tell us about the real world? The case of lotteries with extreme payoffs

In this study, we conduct a laboratory experiment in which the subjects make choices between real-world lottery tickets typically purchased by lottery customers. In this way, we are able to reliably offer extremely high potential payoffs, something rarely possible in economic experiments. In a between-subject design, we separately manipulate a number of features that distinguish the situation faced by the customers in the field and by subjects in typical laboratory experiments. We also have the unique opportunity to compare our data to actual sales data provided by the operator of the lottery. Overall, we find the distributions to be highly similar (meaning high external validity of the laboratory experiment). The only manipulation that makes a major difference is that when the probabilities of winning specific amounts are explicitly provided (which is not the case in the field), choices shift towards options with lower payoff variance. We also find that standard laboratory measures of risk posture fail to explain our subjects' behavior in the main task.


Kachurka Roman, Krawczyk Michał, Rachubik Joanna
Decision making under risk External validity Longshot bias Perception of randomness Number preferences in lotteries

WP(11/2019)296. The limitations of the representativeness heuristic: further evidence from choices between lottery tickets

Authors: Krawczyk Michał, Rachubik Joanna
The representativeness heuristic (RH) proposes that people expect even a small sample to have similar characteristics to the parent population. One domain in which it appears to operate is the preference for combinations of numbers on lottery tickets…

WP296. The limitations of the representativeness heuristic: further evidence from choices between lottery tickets

The representativeness heuristic (RH) proposes that people expect even a small sample to have similar characteristics to the parent population. One domain in which it appears to operate is the preference for combinations of numbers on lottery tickets: most players seem to avoid very characteristic, "unrepresentative" combinations, e.g. only containing very low numbers. Likewise, most players may avoid betting on a combination that was drawn recently, because it would seem particularly improbable to be drawn again. We confirm both of these tendencies in two field experiments, building upon Krawczyk and Rachubik (2019, KR19). However, we find no link between these two choices: it is not the same people that show the two biases. In this sense, the RH does not organize the data well. Nevertheless, there are some links related to rationality across the two choices – people who are willing to forgo a monetary payment in order to get the preferred ticket in one task are also willing to do it in the other. We find such preference to be related with misperception of probabilities and providing intuitive, incorrect answers in the Cognitive Reflection Test.


Krawczyk Michał, Rachubik Joanna
Decision making under risk Gambler’s fallacy Lottery choice Perception of randomness Number preferences in lotteries Representativeness heuristic

WP(12/2016)203. What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies?

Authors: LaRiviere Jacob, Czajkowski Mikołaj, Hanley Nick, Simpson Katherine
This paper reports the results of a stated preference experiment designed to test for how information provided in a survey affects knowledge, and how knowledge affects preferences for a public good. A novel experimental design allows us to elicit sub…

WP203. What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies?

This paper reports the results of a stated preference experiment designed to test for how information provided in a survey affects knowledge, and how knowledge affects preferences for a public good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. We find there is no marginal impact of knowledge on the mean nor the variance of WTP for changes in the environmental good; but that ex ante knowledge does affect stated WTP. Our results are consistent with preference formation models of confirmation bias, costly search, or timing differences in learning and preference formation. Our results raise questions about the purpose and effects of providing information in stated preference studies.


LaRiviere Jacob, Czajkowski Mikołaj, Hanley Nick, Simpson Katherine
Learning Information Behavioral Economics Decision Making Under Uncertainty

WP(9/2014)126. Happy-go-lucky. Positive emotions boost demand for lotto.

Authors: Halicka Zuzanna, Krawczyk Michał
The objective of this work was to investigate whether situational emotions can influence consumers? decision to purchase lottery tickets. We conducted a field experiment in which positive or negative emotions were induced immediately prior to such a …

WP126. Happy-go-lucky. Positive emotions boost demand for lotto.

The objective of this work was to investigate whether situational emotions can influence consumers? decision to purchase lottery tickets. We conducted a field experiment in which positive or negative emotions were induced immediately prior to such a decision in 685 subjects unaware of their participation in a study. Two methods of induction?gambling related and gambling unrelated?were used to verify the robustness of the results. We found that subjects in whom positive emotions were induced, in both gambling and non-gambling contexts, bought lottery tickets significantly more often than subjects with negative emotions or those in the control group.


Halicka Zuzanna, Krawczyk Michał
decision making lotteries induced emotions gambling-related cues field experiment
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