Lima, Marcos A. M. (Faculdade de Economia e Finanças - IBMEC-RJ);

Resende, Marcelo (Universidade Federal do Rio de Janeiro. Instituto de Economia).

Economia Aplicada; volume 10, número 2, páginas 181-191. Junho 2006.

lotteries;

rational expectations.

The paper investigates the prevalence of rational expectations in the case of two Brazilian lotteries (Quina and Mega-Sena). The testing strategy relates to an orthogonality condition between the conditional forecast error and the information set. Specifically, the residual of a equation for net price of a lottery ticket should be uncorrelated with sales The results favoured the rational expectations hypothesis only in the case of the Mega-Sena that is subject to broad media coverage. Clearly the Quina lottery is associated with a diferent profile of betters.