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    Rational addiction and sports gambling by Thompson, Kai Roland

    This thesis applies the theory of rational addiction to sports gambling. Based on this theory developed by Gary Becker and Kevin Murphy, this thesis will attempt to show evidence that gambling on sports is an addictive behavior by seeing if past and future consumption of sports gambling has an effect on current consumption while accounting for other variables. Using two data sets on the amount of money bet monthly on football and annually on the Super Bowl, this thesis runs OLS and two-stage least square regressions of amount of money bet on the independent variables to see if a correlation exists. The results of these regressions show that both past and future consumption have a positive and significant relationship with current consumption in the overall football market but is not significant with the Super Bowl data set. However, the price variable for the overall football market was insignificantly positive, while the same variable was insignificantly negative in the Super Bowl data because of the alignment of the losses and bets variables.