Syndication, Institutionalization, and Lottery Play

Abstract

Why do people play the lottery? Since lottery tickets are assets with negative expected return, lottery play challenges the basic assumptions of economic theory. This article approaches lottery play from a networks perspective and focuses on syndicate play. A comparison of the development of lottery markets in Germany, Austria, Spain, and Portugal from the 17th century onward shows that lottery play declined with rising incomes except in countries in which syndicate play diffused widely, namely, Spain, and to a lesser extent, Portugal. Although syndicating originated among the relatively poor as a response to an increase in lottery prices, it persisted even when individual play became affordable. This article contends that syndicating endured because of an institutionalization process by which lottery tickets have transformed from purely economic assets into symbolic carriers of interpersonal ties that convey membership and status position in relevant social networks.