Impact of lottery promotion wins and losses: evidence from a promotion in a mobile payment service

Abstract
Purpose Lottery promotion is a gambled price discount that provides random incentives for each consumer transaction. This study investigates how winning (i.e. being selected exactly once during the promotion) and losing (i.e. never being selected) influence consumer payment both during and after the promotion.

Design/methodology/approach Using data from a lottery promotion conducted by a Japanese mobile payment provider, we applied a difference-in-differences with propensity score weighting approach. By comparing winners and losers, respectively, to non-participants, we estimated the causal effects of winning and losing on consumer payment during and after the promotion.

Findings The results show that, during the promotion, even those who lost the lottery increased their payment amounts compared to non-participants and winners demonstrated a larger increase than losers. Furthermore, after the promotion, losing still led to higher payment amounts relative to non-participation, while winning produced an even greater increase than losing.

Originality/value Few previous studies have focused on the losing effect, used non-participants as a baseline or examined the post-promotion period. This study fills an important research gap by identifying and comparing the causal effects of winning and losing on consumer payment during and after the promotion. Academically, it extends uncertainty resolution theory to scenarios involving losses and provides empirical evidence for habit formation driven by the promotion experience, independent of incentive receipt. By discussing these effects, this paper also provides comprehensive insights into the cost-effectiveness and design of lottery promotions and offers significant practical implications.