Behavioral-economic Nudges and The though of being rich tomorrow

Abstract

The government lottery is something that everyone in society knows and is familiar with. Some people think that buying a government lottery is buying a chance that they will have a better life in the future even though the chance is only 1 in a million. This research therefore aims to study the factors affecting the government lottery purchasing behavior and finding ways for adjusting the government lottery over-purchasing behavior of the sample group which are 170 volunteers who regularly buy lottery tickets. This research has also applied the Nudges principle from Behavioral Economics to encourage the experimental group to reduce their buying behavior in government lottery by using a follow-up experiment for a period of 90 days. In the experiment, the researcher applied the concept of Loss Aversion by providing negative news about the government lottery (bad news) to the first experimental group. We also notify the accumulated funds for purchasing government lottery tickets to the second experimental group. While, the last group is a nudge by providing information about a good life after retirement. The study found that among people who buy a lot of lotteries, giving negative information about the government lottery is the most effective way to change their behavior. In the group of people who buy less amount of lottey, the accumulated cost notification information provision will encourage the experimental group to change their behavior.