Ever wanted to know about lottery law? A lot about lottery law? And economics? And why people love them so much in spite of the fact that nearly everybody loses his money? And why legislatures continue to authorize them? Here's your article. Ronen Perry and Tal Zarkey, 'May the Odds Be Ever in Your Favor': Lotteries in Law. Here's the abstract.
Throughout history, lotteries have been used in numerous legal contexts. However, legal theorists have rarely discussed the role of randomization in law, and have never done so systematically and comprehensively. Against this backdrop, the Article has three underlying goals. First, it fills the aforementioned gap by providing a theoretical framework for assessing lotteries’ role in legal resource allocation. It innovatively integrates fairness and efficiency concerns, critically evaluating and applying insights from various disciplines, including economics, philosophy, political science, psychology, and theology. This multidisciplinary framework — of unprecedented breadth and complexity — provides lawyers and policymakers with a powerful analytical tool for assessing the possible use of random allocation schemes. Second, the Article recognizes the importance and highlights the pervasiveness of lotteries in law. It does so by analyzing and appraising the historical and present role of lotteries in numerous legal contexts through the theoretical prism. It also advocates a cautious expansion of the use of lotteries in other contexts, a notion that runs counter to the basic intuition that the law must be committed to reason and certainty. Third, the Article substantiates a jurisprudentially provocative thesis: While random-based schemes can be and are employed in many settings, there is no consistent set of justifications for all applications. The rationalization is highly varied and context-specific.
To construct and apply the theoretical framework, the Article uses the fundamental distinction between fairness and efficiency as a cornerstone. Part I unveils the fairness of random selection as a matter of common perceptions and normative commitments. It starts by showing that lotteries are often perceived as fair allocation methods, especially compared to the alternatives (“positive fairness”). Part I then examines whether the use of lotteries can be justified on the ground of fairness (“normative fairness”). It discusses the outmoded theological justification which associates random selection with divine intervention, the egalitarian argument and its limits, the fairness-related advantages and disadvantages of processual detachment from human agency, and fairness vis-à-vis people who do not take part in the primary allocation, be they allocation candidates or allocators.
Part II addresses the advantages and possible drawbacks of random selection in terms of efficiency, compared to conventional alternatives: auctions, need- and merit-based allocations, and queues. It first examines recipients’ ability, ex post, to maximize the utility of the allocated resource, as well as ex post psychological effects of the allocation method. This Part then analyzes ex ante changes in potential recipients’ behavior created by random allocations, also noting the outcomes of the so called “insulation” from power-structures facilitated by random processes. Next, Part II examines the relative advantages and shortcomings of random selection in terms of administrative costs. Finally, it discusses possible effects of random allocations on society at large, such as political economy dynamics, and the potential impact on information flow, public knowledge, and taxation policy.
Download the full text from SSRN at the link.
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