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2013
- handle: 10670/1.xrrdov
- halshs: halshs-01066866
info:eu-repo/semantics/OpenAccess
Mots-clés
1697 Lottery-loan Malt Lottery Expected and actual costs of loans and lotteries Lottery tickets as legal currencySujets proches
Personal development Growth (Psychology) Personal growth Self-improvement Investors Shareholders Impoverished people Disadvantaged, Economically Low-income people Poor people Pauperism Poor--Economic conditions Poor, The Economically disadvantaged Nurture and nature Nature versus nurture Genetics and environment Nature--Nurture Environment Heredity and environment Specie Monetary question Money, Primitive Currency Standard of value Borrowing Lending Loans for consumption Learning process Case Donations Presents Funds Funding Environment Ecological science Environmental biology Bionomics Ecological sciences Environment Balance of nature Oecology Biology--Ecology Ecological processes Financiers Investors Environment Scholarship Learning Finance, commerce, confiscations, etcCiter ce document
Georges Gallais-Hamonno et al., « Learning by doing: the Failure of the 1697 Malt Lottery-Loan », HAL-SHS : économie et finance, ID : 10670/1.xrrdov
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Résumé
The failure in 1697 of the 'Malt Lottery', the second Lottery-Loan, presents a beautiful case study. From a practical point of view, it tells us three things. 1) The technical features of the English State lotteries-loan were established for more than a century after only three experiments. 2) Its two components ('lottery' and 'loan') led to an abnormally poor return for investors since its expected return was 3.91% whereas its effective one was 5.84% - --- two figures in contradiction with the 6.3% advanced by Dickson (1967). 3) A most strange solution was imagined to counteract the failure: delivering the unsold tickets to the Exchequer for being used as cash. From a more theoretical point of view, the condition North and Weingast (1989) advanced for a successful financial issue proves necessary but not sufficient. The Malt Lottery failed (1,763 tickets sold out of 140,000) because it did not meet the three requirements for success: its return was too low and was lower than the return on competitive assets; its reimbursement dates were uncertain; and the economic and political environment was gloomy.