Research on sustainable development of China's lottery industry based on the Hotelling model

Lottery, as a source of government revenue, has played an important role in the development of public welfare. However, under the current issuing framework, Welfare Centre and the Sports Lottery Centre are in the price competition for market share. On the one hand, the raising efforts of Community Chest is weakened, on the other hand, public property of the lottery is damaged. So there is a urgent problem need to be solved that how does the financial authority coordinate the two major lottery centers by laying sales outlets. Through the extension analysis of Hotelling model this problem is discussed in depth and some conclusion is provided for competent authorities to develop the appropriate policies. The conclusions are following: when there is no difference in the lottery, the sales outlets should be placed far away from each other to avoid cannibalism; However, in order to maximize the total social profits, Welfare Lottery and Sports Lottery should strive to be competitive differentiation. When the two kinds of lottery are different, whether the lottery sales outlets is concentrated or discrete, the social gross profit is greater than there is no difference between the two kinds of lottery. This electronic document is a “live” template. The various components of your paper [title, text, heads, etc.] are already defined on the style sheet, as illustrated by the portions given in this document.