Power Markets: Transferring Systematic Risk to Lottery Players |
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| Authors: | James D Miller Matthew R Morey |
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| Institution: | Jim Miller is Assistant Professor of Economics at Smith College, Northampton, MA.; Matthew R. Morey is Associate Professor of Finance at Pace University, New York, NY. |
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| Abstract: | This article shows how a state could design a lottery that absorbs some of the financial market's systematic risk. Under this lottery, prizes would be positively correlated with the stock market. This lottery could be a profitable complement to existing state lotteries. |
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