Testing for rational expectations in the UK National Lottery

The concept of rational expectations has typically been assumed, without te sting, in the analysis of consumer demand and market efficiency in betting markets, including betting on lottery games. Lottery games offer an excelle nt opportunity to test how participants process the information that is ava ilable to them. Using the UK National Lottery as our particular case, we fi nd that participants, in general, efficiently process available information . Specifically, they act as if they can, on average, forecast the level of sales for a given drawing.