The Losers Distribution, with Applications to Financial Exclusion

This paper develops the “Losers Distribution,” a new discrete probability distribution that describes the number of losers in a k-player game with n-fold identical trials. The problem of financial exclusion demonstrates one application. Luck is used to unleash, pool and circulate the financial resources of the poor in much the same way that interest rates pool and reallocate financial resources among the non-poor. I propose compensated, subsidized lotteries as a complement to microfinance for providing financing to the poor.