

Ask HN: $640 Million... why do so many people insist on buying lottery tickets? - danvideo


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dfc
For one dollar a lottery player purchases entertainment and maybe even a bit
of optimism for a little bit of time.

I have always found the "math tax" line silly. I've never understood why "math
tax" people assume that the only utility that a lottery ticket provides is the
expected value of the payout. Is a ten dollar ticket to a spy movie a waste of
money since there is little likelihood that watching it is going to get me a
job with some OGA?

~~~
wegwerf
> For one dollar a lottery player purchases entertainment and maybe even a bit
> of optimism for a little bit of time.
    
    
      And above all there is gambling, the cheapest of all
      luxuries. Even people on the verge of starvation can 
      buy a few days' hope ('Something to live for', as they
      call it) by having a penny on a sweepstake.
    

\-- George Orwell, The Road to Wigan Pier, chapter 5

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RollAHardSix
Except that quote is only really relevant when the gambling is done on a
repetitive basis. For many, this was the first and possibly/probably, the only
time they decide to play the lottery.

This lottery only garnered so much attention because of the high jackpot,
however even that was an anomaly. For most people who pay the lottery
repeatedly, yes, it is a 'tax'; however many people who are more than capable
of figuring the odds, still decided to play this jackpot - if only for the
chance of winning.

Apologies for bad grammar, on a 48 hour day and my 2 cups of coffee isn't
jump-starting my brain.

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paulsutter
The urge to play the lottery is a very normal cognitive bias. I know it has a
negative expected return, but I do feel drawn to play it when the prize gets
very large. The actual reason I didn't participate is that my aversion to
waiting in line is even stronger than my urge to buy a ticket.

Dan Kahneman's book "Thinking Fast and Slow" is good reading for anyone who
thinks that only stupid people feel the urge to play the lottery. It's more
subtle than that, and worth understanding because these biases affect all of
us in many important decisions.

Note that the lottery has about the same expected return as insurance (around
50% I think), and I've always bought insurance for risks I don't want to cover
personally. Is overpaying to cover downside risks "smart" but overpaying for
big upsides "stupid"? I don't have an opinion either way. If I consider the
question, I can't tell if my own opinion would be more informed by my
knowledge of psychology and statistics, or by my attitudes about prudence and
waste.

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andywood
I think very analytically the majority of the time, even when I'm not
programming. When I saw this lottery in the headlines and in friends' Facebook
posts, the first thing I did was break out a calculator and figure all the
relevant statistics of interest to me, not because I thought it might be worth
it, but just to see exactly, numerically, _how_ ridiculous the mass-attention
to this lottery was. I suspect a lot of the HN community think like this.

Most people absolutely do not think this way. The thinking of the average
person is more social, more concerned with ritual, more qualitative, and less
quantitative. Their friends are talking about it, the number is big, people
are going in on ticket pools together, they fantasize, and some of the affect
of that fantasizing transfers to their goal-seeking behavior. Not fully
appreciating that they _can_ refer to solid math on this, they adapt their
attitude and expectations to the cues of those around them.

~~~
dfc
What is wrong with fantasizing? It seems that to HN is full of dreamers and
people who ignore statistics and likely outcomes. How many small businesses
fail? How many people quit their steady job in order to go join a startup?

~~~
polyfractal
I think the difference is, right or wrong, that when people ignore statistics
and pursue startups, they have the feeling that they can affect the outcome.

A lottery is just a random number generator. A startup is blood, sweat and
tears...and if I sweat _just a little more_ we can beat the odds.

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mchannon
Something's got to be a bit out of whack when governments sanction and even
sponsor lotteries where the odds of even getting your investment back are
worse than 1:4, and governments make it illegal for masses of people to invest
equivalent amounts in startup companies, all in order to protect the people
from the possible downside of losing their investment.

Reminds me of a bumper sticker: "Don't steal. The government hates
competition."

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danvideo
"I guess I think of lotteries as a tax on the mathematically challenged."
-Roger Jones

I haven't followed much of his other work, but this rings true.

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bicknergseng
A lot of people scoff at the lottery because of the odds, yet few would go
without earthquake or fire insurance and many have money in the stock market.

Here's a hint: there's more to the mathematics than odds.

It's about expected return, barrier to entry, and the consequences of not
doing something. Odds are only a small part of the equation.

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wallflower
We bought $40 of tickets. We did it because we lacked the vision to buy AAPL
when it had a $5B market cap.

It is really a form of entertainment and escapism. Someone could do an
interesting photo series of people at booths (when there is a big jackpot, not
the regular regulars).

Day dreaming and lottery entering, both useless/damaging in excess - maybe ok
in moderation.

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Mankhool
As an outsider (a Canadian) I thought the most compelling thing about this
jackpot (MegaMillions $656 Million) was that it escalated from the announced
$540 Million BETWEEN draws. Surely there is not a better indicator the of
state of the American economy than this.

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sp332
As the value of a winning ticket goes up, the expected value of any given
ticket approaches the price of a single ticket. Of course this isn't really
true, but even a small miscalculation, multiplied by half a billion, could
easily make it look like a good deal.

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clarebear
What is the expected value of a MegaMillions ticket in this drawing?

~~~
Lazare
Highly negative. Lottery tickets are always highly negative, and it is a
commonplace observation that the expected value is much more negative for
lottery drawings with unusually high jackpots.

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malux85
"The lottery is a tax on hope" - David Mitchell

