Totalisators
http://app.feedback.gov.sg/asp/ocp/ocp01d1.asp?id=2845
e-Consultancy Paper for the Casino thingies.
I have got reservations on ....
- The word Totalisasosetor. What on earth is this? Is this in the Oxford or Coxford or Bureaucratice dictionary?
- The $100 entry fee for Singaporean citizens as double standards.
- The $100 entry fee as an economic disincentive to possibly replace moral disincentives to gambling (a.k.a. the freakonomics argument)
- The $100 entry fee actually encouraging more gambling than less (I re-jigged a couple of assumptions for the standard budget line and utility curve model to come out with a possibly not-so-good result.)
[Ooops. My model manipulation for the last point went a bit haywired. Re-thought through it this morning, and the result was still such that gambling expenditures would be reduced, though reduced to a smaller extent than would have been expected in the standard model.
Might come up with an alternative model later, based on the 大财不出, 小财不进 principle, i.e. will people, having paid the $100, be encouraged to gamble more in an attempt to make back the $100 or to cancel out the disutility (including psychological disutility stemming from the apparent double standards) associated with having to pay the $100?]
posted by the third wei at Monday, October 17, 2005
4 Comments:
Hi,
interesting. Could you care to expand more on the budgetry constraint and utility curve by a bit more?
Even though I 'm an economic student myself, I get hopeless when it comes to the modelling part. Heh. So hope to see your analysis of it.
Thanks!
8:28 am
I was attempting a two-stage model which I have just been writing out when I realised a crucial mistake.
Never attempt modelling when a Chinese medium is trying to convince you that you are in dire trouble.
Sorry. :(
But never mind, I will try to think of another model.
Really paiseh. :$
9:04 am
Hmm I thought that standard economics in un year one should indicate that the $100 fuctions as a sunk cost, therefore should not be taken into account of the opportunity coss calculation?
Although it would probably discourage the casual person who have a x probability of becoming hook on blackjack.
Have you consider the possibility of adapting satisficing decision making model into your modelling?
12:04 am
In standard economics, the assumption is that rational agents would treat the $100 dollars as a sunk cost. In reality, this may not be the case. The problem is with the assumption of rationality. Some people argue that gambling is irrational, because gambling has an expected negative return. If accordingly gamblers are indeed irrational, how likely are they to take the $100 as merely a sunk cost? How likely are they to insist that they have to make back the $100?
Another problem, using the indifference curve and budget line model, is the assumption of convexity for the utility function. John Kay and others before him have pointed out that where addiction is concerned, i.e. when agents are addicted to a good / service, the indifference curve would be concave. Which then has implications on how much the agent spends on components of his consumption bundle (Spend EVERYTHING on gambling, $100 entrance fee or not.)
Thanks for suggesting the satisficing decision-making model. :) I'll need to look it up, as I am totally unfamiliar with it. I haven't encountered much of organisation theory and theory of the firm.
12:08 pm
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