Ask HN: $640 Million... why do so many people insist on buying lottery tickets?
12 comments
> 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.
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.
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.
When the prize is large you get more people willing to risk a tiny amount just to get that short time of dreaming, and the teeny tiny chance of a big win. There's not much problem with that.
But lotteries also attract people who just don't get the numbers. People who can't afford to be spending 10, 20, 50 dollars on lotteries. That's a problem.
But lotteries also attract people who just don't get the numbers. People who can't afford to be spending 10, 20, 50 dollars on lotteries. That's a problem.
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.
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.
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.
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.
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?
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.
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.
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."
Reminds me of a bumper sticker: "Don't steal. The government hates competition."
"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.
I haven't followed much of his other work, but this rings true.
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.
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.
[deleted]
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.
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.
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.
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.
"The lottery is a tax on hope" - David Mitchell
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?