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西北农林科技大学经管学院教授,博士生导师。国务院学位委员会第六届学科评议组成员。教育部新世纪优秀人才。长江学者评审专家。曾任中国人民大学《农业经济研究》顾问。美国《现代管理》、《世界经济探索》编委、审稿专家。中央电视台特约嘉宾。陕西广播电视台特约评论员。曾出访新西兰、韩国、新加坡、荷兰、奥地利、越南、蒙古、台湾。提出了“精细密集农业”、“不在意资金”等新观点。出版专著2部,发表论文300余篇,被SSCI、CSSCI收录64篇,作报告1000余场,在中央电视台、陕西广播电视台做节目400多次。

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王征兵:Careless Money and Lottery【China-USA Business Review】  

2009-08-11 16:38:52|  分类: 不在意资金 |  标签: |举报 |字号 订阅

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                                  Careless Money and Lottery*

                                                       Zhengbing Wang **

1. Careless Money Theory

1.1 Connotation of Careless Money

People tend to bargain while shopping. The part, which both parties bargain, is the amount that buyer want to cut and sellers want to keep, and is meaningful in a transaction. We named it cared money or cared value, which has relation with the volume of a transaction. Another part,which can be neglected by both parties in a transaction is careless money. For example, Seller and buyer usually bargain for minimum unit of hundred Yuan if the value of the goods is over one thousand Yuan, and don’t discuss on one or two Yuan since the sum is far less compared with the total value of the transaction. In other words, the seller and buyer usually don’t care who will get one or two Yuan in this transaction. So, we define the focus that two parties discussed as cared money, while the part which two parties neglected s careless money.

Besides shopping, we can easily find the effect of careless money in charitable donation, entertainment as well as profit distribution. People merely spare their careless money for charity, otherwise they will inevitably regret if some of their cared interests were undermined. It is true as entertaining friends. Faced with many alternatives, the final decision for a rational host directly coincides with his careless money. In China, people, when allocating the profits, tend to neglect the odd value since it is the careless money.

1.2 How to Decide the Proportion of Careless Money?

Careless money is a feeling of human being’s inner unconsciousness, but we wonder if there is any rule to decide on the proportion of careless money? The answer is yes. According to our observations, the amount of careless money has quantitative relation with the volume of a transaction as well as personal assets. Specifically speaking:

In shopping, the proportion of careless money varies from one tenth to one per mill of the volume of transaction.

In donating, the proportion of careless money relates to personal assets. Commonly, one tenth of personal total assets are cared money, while one per mill is careless money. Videlicet, the donation amount of an ordinary person accounts for about one per mill of the value of his personal total assets. Let’s name it “the Millesimal Law”. If one’s expenditure is far more than one per mill of his personal total assets and approach cared money, he would surely regret doing so and turn to be wiser and more rational eventually. If it were far less than one per mill, he would also fell uneasy since it makes him shy. Thus, the proper proportion for individual in charitable donation is one per mill of his personal total assets.

When distributing profits, the proportion of careless money related to the amount which one will attain. Commonly, one tenth of the attained value is cared money, while one per mill is careless money.

It is obvious that the millesimal law is the basic criterion in deciding the amount of careless money.

1.3 Explanations on the Careless Money

It is sure that there are some exceptions to the careless money. Firstly, we regard that the criteria in deciding the amount of careless money is suit for ordinary person. For example, in generous opinions, it might be well over one per mill, while the miser thinks that it is far less than one per mill. Unfortunately, the economic laws we are exploring mainly emphasize the ordinary economic activities. Obviously, these exceptions are rare and will not affect the exactness of the laws. Secondly, according to our observations, the theory is not suit for the bestow among the relatives since blood is thicker than water, even in some cases there are supporting relationship in the aspect of legislation between relatives. Thirdly, the donation from enterprise, if it were not in pursuit of the resounding effect, is also abided by the law. Otherwise, the donation from enterprise is far more than one per mill. Fourthly, the law is based on each single activity, that is to say, in every donation, entertainment, or distributing the assets, the millesimal law stands. Surely, it does not mean that the payout every time is equal to one per mill, the fluctuation around the one per mill is an ordinary phenomenon, but in general, the more times one paid, the average ratio approaches one per mill. Finally, the millesimal law is a latent rule which hidden people’s economic activities. Though most of people still dose not realize the law, they follow it indeed.

2. Theoretical Basis of Lottery

Lottery industry has a long history for hundreds of years. It is experiencing a rapid developing stage, especially in developing countries. The reasons why the public accepts it are mainly based on the following statements:

2.1 Theoretical Basis I: The Nature of Gambling

Gambling is human being’s nature and instinct. The temptation of lottery is that people are in hope of making fortune in risk of little money though the chances are slim. Except for this, other reasons should also be considered: (1) Though there are many ways to make fortune, it is no doubt that gambling is the quickest way to realize the dream; (2) It is easy to learn for gambling; (3) The regulations of gambling is fair for everyone.

Currently, Chinese government, taking good use of human being’s nature of gambling, is issuing welfare lottery and sports lottery to raise necessary money for economic development. Undoubtedly, the funds that can be raised will be much less if people are pure motivation of investing on sports or welfare lotteries, and they are out of charity. Lottery game is firmly rooted in human being’s nature of gambling. Though lottery has elements of gambling, it has many differences with gambling: Firstly, the amount of stake and the ratio of return is different. For gambling, the amount of stake has direct proportion with the output of the game, while in lottery game the amount per stake is fixed. Let’s take Chinese welfare lottery game as an example, the face value per share is one to two Yuan, but the return is varies from zero to millions of Yuan, which provides every participators equal opportunity to be a millionaire in one night. Secondly, the probability of the returns is different. The probability of returns from gambling is much high, while as for lottery game it is much low. According to our observations, the probability to win the first prize from the Shanxi Fengcai Sports Lottery Game is only 0.25 per mill. Everyone who wants to win the first prize must choose a group numbers of seven from 1 to 33. Thirdly, it is much easier to learn lottery game. One can learn the rules of a lottery game within seconds. Fourthly, it needs less time and energy. Unlike gambling, many lottery games can be finished instantly. For example, once participators buy the instant lottery game, he/she will check if he is the lucky bird instantly. People can await the results in a few days. Finally, the property is different. Gambling is a kind of game that reassigns the capital among participators, which was prohibited by many governments. Lottery is a channel for government to raise money for specific purposes, especially for welfare undertakings. These institutes, which hold lottery game, are admitted by government.

2.2 Theoretical Basis II: Careless Money Theory

Owing to the slim probability of bearing the prize, especially the great ones in lottery, people usually spend a small portion, such as one per mill of their earnings, on lottery. Thus, it has the slightest effect on their life even they cannot bear the palm, and the hope to make fortune is still lasting to the expected future. This is why experts on media give suggestions to care for the amount which invested on lottery whenever possible.

3. Enlightenment on Lottery Industry

Careless money theory is meaningful to the economic activities. Once having profound understanding on careless money, the government or charities will predict the donation potential of community or society as a whole easier, individuals can take advantage of the nature law to make rational decisions on lottery, and then improve the utility of their money.

3.1 Prediction of the Rational Aggregate Funds before Issuing the Lottery

Once the careless money theory stands, it will facilitate the government to predict rational aggregate funds of a specific lottery during a specific period. We can estimate the rational amount of issuing lottery with the following equation:

If the amount of lottery issued is less than the rational amount, it shows the potential; Vice versa, the bubbles in the lottery market are appearing and corresponding measures that need to take.

3.2 Decision-making on the Aggregation of One Lottery Funds

Above analysis has shown that the amount of people investing in lottery is strictly abided by the millesimal law. This will facilitate individual’s decision-making on how much money which should invest on the lottery. According to our six-month investigation on 100 luck tries, the amount of their careless money betting on lottery is about one percent of household’s average month income, and one per mill of its annual income or so. So, the rational amount of individual’s betting money on lottery which he can spare each time can be estimated:

After individual’s rational amount invested on a specific lottery is ascertained, another question is coming up. How many times for an individual should be on the lottery? It seems it is early to have a definite answer now. As for our research on careless money in China, three times are appropriate for the charitable donation annually. Maybe it can be a reference for the investment on the lottery.

 

References:

1. G. Hofstede. Organizational Dynamics, Cambridge University Press, 1980

2. Richardsteers, Lyman W. Porber. Motivation and Behavior, Oxford University Press, 1976

3. Zhengbing Wang. Discussion on the Careless Money, Economist, 2001(1): 121-122

(Edited by Bingsong Wu, Zhenfeng Zhang and Susan)



* The author acknowledges the support of National Natural Science Foundation of China (grants: 70273035).

** Zhengbing Wang, professor and Ph. D. supervisor of the College of Economics and Management, Northwest Sic-Tech University of Agriculture and Forestry (NWSUAF); The author’s research fields are operation patterns and agriculture economics and has put forward economic theories of “absolute input theory ”, ”costless labor theory”, “intensive agriculture” and “careless money theory”; Tel: 029-87081140, 87092167, 13319257553; E-mail: wzb9251@sohu.com.

          

刊于《China-USA Business Review》2004年第9期P79-81

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