Skip to main content
SpringerLink
Log in

An investigation into gambling purchases using the NBD and NBD–Dirichlet models

  • Published:
Marketing Letters Aims and scope Submit manuscript

Abstract

Past research on gambling behavior has focused largely on cognitive and affective explanations, but has not explored the influence of past gambling behavior or habit. In this study, it was hypothesized that gambling behavior followed predictable patterns based on past behavior. We found that these patterns could be described by the negative binomial distribution (NBD) and NBD–Dirichlet models at game and category levels, respectively. An empirical study using the 1999 Australia Productivity Commission survey dataset provided some support for the usefulness of these models in describing gambling consumption. The paper explores the implications for identifying problem gambling and influencing gamblers’ behavior.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Abbott, M. W., & Volberg, R. A. (2000). Taking the pulse on gambling and problem gambling in New Zealand: A report on phase one of the 1999 national prevalence survey. New Zealand: The Department of Internal Affairs.

    Google Scholar 

  • Ajzen, I. (2002). Residual effects of past on later behavior: Habituation and reasoned action perspectives. Personality and Social Psychology Review, 6(2), 107–122. doi:10.1207/S15327957PSPR0602_02.

    Article  Google Scholar 

  • Bernstein, P. L. (1996). Against the Gods. New York: Wiley.

    Google Scholar 

  • Collins, P., & Barr, G. (2001). Gaming and problem gambling in South Africa. South Africa: National Center for the Study of Gambling.

    Google Scholar 

  • Conventry, K. R., & Hudson, J. (2001). Physiological arousal and sensation seeking in female fruit machine gamblers. Addiction (Abingdon, England), 94(3), 425–430. doi:10.1046/j.1360-0443.1999.94342512.x.

    Google Scholar 

  • Dickerson, M. G., Hinchy, J., & Fabre, J. (1987). Chasing, arousal and sensational seeking in off-course gamblers. British Journal of Addiction, 82, 673–680. doi:10.1111/j.1360-0443.1987.tb01530.x.

    Article  Google Scholar 

  • East, R., Wright, M., & Vanhuele, M. (2008). Consumer behavior: Applications in marketing. London: Sage.

    Google Scholar 

  • Ehrenberg, A. S. C. (1959). The pattern of consumer purchases. Applied Statistics, 8, 26–41. doi:10.2307/2985810.

    Article  Google Scholar 

  • Ehrenberg, A. S. C. (1988). Repeat-buying: Facts, theory and applications. New York: Oxford University Press.

    Google Scholar 

  • Ehrenberg, A. S. C. (1995). Empirical generalisations, theory, and method. Marketing Science, 14(3), 20–28. doi:10.1287/mksc.14.3.G20.

    Article  Google Scholar 

  • Ehrenberg, A. S. C. (1996). Towards an integrated theory of consumer behavior. Journal of the Market Research Society. Market Research Society, 38(4), 395–427.

    Google Scholar 

  • Ehrenberg, A. S. C., Hammond, K., & Goodhardt, G. J. (1994). The after-effects of price related consumer promotions. Journal of Advertising Research, 34(4), 11–21.

    Google Scholar 

  • Ehrenberg, A. S. C., Uncles, M. D., & Goodhardt, G. J. (2004). Understanding brand performance measures: Using Dirichlet benchmarks. Journal of Business Research, 57(12), 1307–1325. doi:10.1016/j.jbusres.2002.11.001.

    Article  Google Scholar 

  • Freud, S. (1928). Dostoyevsky and Parricide. In J. Strachey (Ed.), The complete psychological works of Sigmund Freud, vol. 19 (pp. 157–170). London: Hogarth, 1961.

    Google Scholar 

  • Goodhardt, G. J. (1968). The incidence of brand-switching. Nature, 200(5764), 304.

    Google Scholar 

  • Herman, R. D. (1976). Gamblers and gambling. USA: D.C. Health and Company.

    Google Scholar 

  • Jeuland, A. P. (1979). Brand choice inertia as one aspect of the notion of brand loyalty. Management Science, 25(7), 671–682. doi:10.1287/mnsc.25.7.671.

    Article  Google Scholar 

  • Jolley, B., Mizerski, R., & Olaru, D. (2006). How habit and satisfaction affects player retention for online gambling. Journal of Business Research, 59, 770–777. doi:10.1016/j.jbusres.2006.01.017.

    Article  Google Scholar 

  • Kate Demspey and Associates (2003). Striking a balance: The impact of gaming in the City of Kingston. City of Kingston, Australia: Leisure and Social Planning Department http://www.kingston.vic.gov.au/Files/StrikingABalanceReport.pdf.

    Google Scholar 

  • Kau, A. K., Uncles, M., Ehrenberg, A. S. C., & Barnard, N. (1998). Competitive brand-choice and store-choice among Japanese consumers. Journal of Product and Brand Management, 7(6), 481–494. doi:10.1108/10610429810244657.

    Article  Google Scholar 

  • Kearns, Z. (2001). The DIRICHLET Worksheet. http://www.massey.ac.nz/∼wwmarket/zane/.

  • Kwok, S. (2006). A systematic analysis of consumer buyer behavior in urban China. Unpublished doctoral dissertation. Sydney: School of Marketing, The University of New South Wales.

    Google Scholar 

  • Lam, D. (2006). Applicability of the duplication of purchase law to gaming. UNLV Gaming Research & Review Journal, 10(2), 55–62.

    Google Scholar 

  • Lam, D. (2007). An exploratory study of gambling motivations and their impact on the purchase frequencies of various gambling products. Psychology and Marketing, 24(9), 815–827. doi:10.1002/mar.20185.

    Article  Google Scholar 

  • Lindner, R. M. (1974). The psychodynamics of gambling. In J. Halliday, & P. Fuller (Eds.), The psychology of gambling (pp. 217–239). London: Allen Lane.

    Google Scholar 

  • Martinez, T. M. (1983). The gambling scene—why people gamble. Springfield, IL: Thomas.

    Google Scholar 

  • McMillen, J., & Doran, B. (2006). Problem gambling and gaming machine density: Socio-spatial analysis of three Victorian localities. International Gambling Studies, 6(1), 5–29. doi:10.1080/14459790600644093.

    Article  Google Scholar 

  • McPhee (1963). Formal theories of mass behavior. New York: The Free Press of Glencoe.

    Google Scholar 

  • Ministry of Public Safety and Solicitor General (2003). British Columbia: British Columbia Problem Gambling Prevalence Study. Victoria, BC: Ministry of Public Safety and Solicitor General.

    Google Scholar 

  • Miyazaki, A. D., Brumbaugh, A. M., & Sprott, D. E. (2001). Promoting and countering consumer misconceptions of random events: The case of perceived control and state-sponsored lotteries. Journal of Public Policy & Marketing, 20(2), 254–267. doi:10.1509/jppm.20.2.254.17364.

    Article  Google Scholar 

  • Miyazaki, A. D., Langenderfer, J., & Sprott, D. E. (1999). Government-sponsored lotteries: Exploring purchase and nonpurchase motivations. Psychology and Marketing, 16(1), 1–19. doi:10.1002/(SICI)1520-6793(199901)16:1<1::AID-MAR1>3.0.CO;2-W.

    Article  Google Scholar 

  • Mizerski, D., Miller, R., Mizerski, K., & Lam, D. (2004). The stochastic nature of purchasing a state’s lottery products. Australasian Marketing Journal, 12(3), 56–69.

    Article  Google Scholar 

  • Morrison, D., & Schmittlein, D. (1988). Generalizing the NBD model for customer purchases: What are the implications and is it worth the effort? Journal of Business & Economic Statistics, 6(12), 145–159. doi:10.2307/1391551.

    Article  Google Scholar 

  • NASPL. (2007). Lotteries Ranked by FY 2006 Sales. http://www.naspl.org/index.cfm?fuseaction=content&PageID=3&PageCategory=3.

  • Oh, H., & Hsu, C. H. C. (2001). Volitional degrees of gambling behaviors. Annals of Tourism Research, 28(3), 618–637. doi:10.1016/S0160-7383(00)00066-9.

    Article  Google Scholar 

  • Ouellette, J., & Wood, W. (1998). Habit and intention in everyday life: The multiple processes by which past behavior predicts future behavior. Psychological Bulletin, 124(1), 54–74. doi:10.1037/0033-2909.124.1.54.

    Article  Google Scholar 

  • Productivity Commission (1999). Australia’s gambling industries: Draft report. Canberra, Australia: Productivity Commission.

    Google Scholar 

  • Quinn, F. L. (2001). First do no harm: What could be done by casinos to limit pathological gambling. Managerial and Decision Economics, 22, 133–142. doi:10.1002/mde.1003.

    Article  Google Scholar 

  • Schmittlein, D. C., Bemmaor, A. C., & Morrison, D. G. (1985). Why does the NBD model work? Robustness in representing product purchases, brand purchases and imperfectly recorded purchases. Marketing Science, 4, 255–266. doi:10.1287/mksc.4.3.255.

    Article  Google Scholar 

  • Shaffer, H., Hall, M. N., & Bilt, J. V. (1997). Estimating the prevalence of disordered gambling behavior in the United States and Canada: A meta-analysis. Cambridge MA: Harvard Medical School Division on Addictions.

    Google Scholar 

  • Sharp, B., & Sharp, A. (1997). Loyalty programs and their impact on repeat-purchase loyalty patterns. International Journal of Research in Marketing, 14, 473–486. doi:10.1016/S0167-8116(97)00022-0.

    Article  Google Scholar 

  • Sprott, D. E., Brumbaugh, A. M., & Miyazaki, A. D. (2001). Motivation and ability as predictors of play behavior in state-sponsored lotteries: An empirical assessment of psychological control. Psychology and Marketing, 18(9), 973–983. doi:10.1002/mar.1038.

    Article  Google Scholar 

  • The Australian Casino Association. (2008). Australia’s casinos—more than gaming. http://www.auscasinos.com/documents/FactSheets/EconomicContribution2005-2006.pdf.

  • Titz, K., Andrus, D., & Miller, J. (2001). Hedonistic differences between mechanical game players and table game players. UNLV Gaming Research & Review Journal, 6(1), 23–32.

    Google Scholar 

  • Triandis, H. C. (1977). Interpersonal behaviour. Monterey, CA: Brooks/Cole.

    Google Scholar 

  • Uncles, M., Ehrenberg, A. S. C., & Hammond, K. (1995). Patterns of buyer behavior: regularities, models, and extensions. Marketing Science, 14(3), 71–78. doi:10.1287/mksc.14.3.G71.

    Article  Google Scholar 

  • Wagenaar, W. A. (1988). Paradoxes of gambling behavior. Hillsdale, NJ: Erlbaum.

    Google Scholar 

  • Walker, M. B. (1992). The Psychology of Gambling. Oxford: Pergamon Press.

    Google Scholar 

  • Wong, I. L. K., & Ernest, M. T. (2003). Prevalence estimates of problem and pathological gambling in Hong Kong. The American Journal of Psychiatry, 160(7), 1353–1354. doi:10.1176/appi.ajp.160.7.1353.

    Article  Google Scholar 

  • Wright, M. (1999). NBDNORMS version 0.1 (Beta).

Download references

Author information

Authors and Affiliations

  1. University of South Australia, Level 4, Yungondi Building, Adelaide, South Australia, 5000, Australia

    Desmond Lam

  2. Department of Information Management and Marketing, University of Western Australia, Social Sciences Building South, 35 Stirling Highway, Crawley, Western Australia, 6009, Australia

    Richard Mizerski

Authors
  1. Desmond Lam
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Richard Mizerski
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Desmond Lam.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Lam, D., Mizerski, R. An investigation into gambling purchases using the NBD and NBD–Dirichlet models. Mark Lett 20, 263–276 (2009). https://doi.org/10.1007/s11002-009-9073-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11002-009-9073-6

Keywords

Search

Navigation