Causal effect of lottery promotions on post-win payments: Evidence from a large field experiment
This study aims to investigate how different incentive sizes in multi-shot lottery promotions, including large and small prizes, influence subsequent consumer payments. Multi-shot lottery promotions allow repeated opportunities to win incentives and are widely used across various industries. Underst...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
LLC "CPC "Business Perspectives"
2025-06-01
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| Series: | Innovative Marketing |
| Subjects: | |
| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/22316/IM_2025_02_Kubota.pdf |
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| Summary: | This study aims to investigate how different incentive sizes in multi-shot lottery promotions, including large and small prizes, influence subsequent consumer payments. Multi-shot lottery promotions allow repeated opportunities to win incentives and are widely used across various industries. Understanding the relationship between the cost of implementing the promotions, such as incentives for winning, and subsequent consumer payments, which drive revenue, is essential for improving cost-effectiveness. This study analyzes large-scale field data from over one million mobile payment service users and employs a stratified randomized experiment method that addresses user-initiated transaction bias. The results show that, during the promotion, winning any prize increases the total transaction amount (by $26.97–$32.80), the number of transactions (by 1.17–1.27), and the average transaction amount (by $8.81–$9.38). Notably, a small prize with a 0.2% return rate yields a return on investment of 1078.8%, surpassing the 5.6% and 8.6% from larger prizes. However, after the promotion, these differences in incentive size have negligible effects on consumer payments. Further analysis, which also examined whether the effects of winning vary depending on users’ frequency of use, reveals that these effects are most pronounced among light users across all outcomes. The findings suggest that allocating multiple small prizes may be more cost-effective than focusing on a few large prizes, especially for lower-usage segments, and offer valuable insights for designing successful multi-shot lottery promotions. |
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| ISSN: | 1814-2427 1816-6326 |