Promoting and countering consumer misconceptions of random events: The case of perceived control and state-sponsored lotteries

An understanding of random events and probabilistic outcomes is integral to buyer decision making for many products, such as insurance policies, servi ce contracts, casino games, sweepstakes, and lotteries. Buyers. however, of ten hold misconceptions that bias their valuations of such marketplace offe rings. The authors examine a common consumer misconception regarding the de gree of control over independent random events associated with U.S. state-s ponsored lotteries. In two studies, the authors demonstrate that countervai ling information (in the form of an informational warning label) can affect perceptions and behavioral intentions based on control-related misconcepti ons, even when such misconceptions are enhanced by promotional information. The authors also find that level of prior lottery play interacts with thes e variables. which suggests that usage-based segmentation can influence the effectiveness of both promotional cues and informational warnings. The aut hors discuss implications of the findings as they pertain to public policy and marketing practice.