Marketing Letters

, Volume 21, Issue 2, pp 149–162 | Cite as

Two-stage lotteries and the value of unresolved uncertainty

  • Ido Erev
  • Ernan Haruvy


We study two-stage lotteries wherein, in the first stage, the consumer may be awarded a lottery ticket for some choices and, in the second stage, some of the lottery tickets win prizes. In a series of Internet experiments, we examine store choice and repeat visits in response to immediate and two-stage lottery incentives. We show that a delayed resolution of uncertainty may dramatically increase the desired response over immediate resolution. However, this effect is due to an interaction of several potentially contradictory effects. When prizes are frequent, the effectiveness of the two-stage lottery is expected to decline.


Reinforcement learning Lottery Secondary reinforcements Anticipation Multiple contacts 


  1. Hirsch, M. (1978). Disaggregated probabilistic accounting information: the effect of sequential events on expected value maximization decisions. Journal of Accounting Research, 1978, 254–269.CrossRefGoogle Scholar
  2. Kamin, L. J. (1959). The delay of punishment gradient. Journal of Comparative & Physiological Psychology, 52, 434–437.CrossRefGoogle Scholar
  3. Loewenstein, G. (1987). Anticipation and the value of delayed consumption. Economic Journal, 97, 666–684.CrossRefGoogle Scholar
  4. Mowrer, O. H., & Ullman, A. D. (1945). Time as a determinant of integrative learning. Psychological Review, 52, 61–90.CrossRefGoogle Scholar
  5. Nord, W. R., & Peter, J. P. (1980). A behavior modification perspective on marketing. Journal of Marketing, 44(2), 36–47.CrossRefGoogle Scholar
  6. Peter, J. P., & Nord, W. R. (1982). A clarification and extension of operant conditioning principles in marketing. Journal of Marketing, 46(3), 102–107.CrossRefGoogle Scholar
  7. Ronen, J. (1971). Some effects of sequential aggregation in accounting on decision making. Journal of Accounting Research, 9(2), 307–332.CrossRefGoogle Scholar
  8. Rothschild, M. L., & Gaidis, W. C. (1981). Behavioral learning theory: its relevance to marketing and promotions. Journal of Marketing, 45, 70–78.CrossRefGoogle Scholar
  9. Skinner, B. F. (1953). Science and human behavior. New York: Macmillan.Google Scholar
  10. Thaler, R. H. (1981). Some empirical evidence on dynamic inconsistency. Economics Letters, 8(3), 201–207.CrossRefGoogle Scholar
  11. Thaler, R. H., & Sheffrin, H. M. (1981). An economic theory of self-control. Journal of Political Economy, 89, 392–406.CrossRefGoogle Scholar
  12. Walters, R. H., & Demkow, L. (1963). Timing of punishment as a determinant of response inhibition. Child Development, 34, 207–214.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.Faculty of Industrial Engineering and ManagementTechnionHaifaIsrael
  2. 2.School of ManagementUniversity of Texas at DallasRichardsonUSA

Personalised recommendations