This paper suggests insurance represents a quid pro quo transaction across states of the world and is purchased to transfer income to a state where it is more valued. It also suggests that gambling represent a similar quid pro quo transaction across states but that consumers gamble to transfer...

Although gambling is primarily an economic activity, no single theory of the demand for gambles has gained wide-spread acceptance among economists. This paper proposes a simple model of the demand for gambling that is based on the standard economic assumptions that (1) resources are scarce and...

This paper suggests that the behavior characterized as the gambler's fallacy can be rational, even though it appears to be contradicted by theory. It suggests that a gambler exhibiting this behavior may not be increasing a wager in response to a fallacious increased conditional probability of a...