Lotteries

No, this post isn’t about epistemology. Cosma Shalizi defends lottery players:

The benefit to playing the lottery comes entirely between buying the ticket, and when the winner is revealed. During this interval, someone who has bought the ticket can entertain the idea that they might win, and pleasantly imagine how much better their life could be with the money, what they would do with it, etc. It’s true that in some sense you always could thinking about “what if I had $280 million?”, but many people find it very hard to get our imaginations going on sheer will-power. A plausible and concrete path to the riches, no matter how low the probability, serves as a hook on which to suspend disbelief. In this regard, indeed, lottery tickets are arguably quite cost-effective. If a $1 lottery ticket licenses even one hour of imagining a different life, I don’t see how people who spend $12 for two or three hours of such imagining at a movie theater, or $25 for ten hours at a bookstore, are in any position to talk.

Despite having held this idea for years, I have never played the lottery, because I couldn’t begin to make myself believe.

This only applies for the largest lotteries. But in North Carolina, people drop a lot of money on smaller games that offer a better chance to win, but no more than a few hundred or a thousand dollars. Maybe the fantasy is still good enough to offset the monetary loss–so long as you’re thinking about the vacation you’ll take and not about having the money for your light bill.

Here’s my own bit of contrarianism: in those smaller lotteries, the expected value of winning may well be negative. On the plus side, there is the money and the enjoyment of winning. On the negative side, winning is positive reinforcement so you play more in the future. Thus, when my mother-in-law put $1 scratch off tickets in my stocking, I spent the next few minutes thinking “don’t win, don’t win”. Anyone who knows my history with video games will understand. Thankfully, while I won seven dollars, I have not been tempted to play in the meantime.

I actually told someone who was addicted to the lottery: “you don’t want to win–it’ll make you keep playing” and he responded “I guess that’s right.” So perhaps the theory is less contrarian than I think it is.

P.S The Slate article that Cosma links to is also a lot of fun.

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2 responses to “Lotteries

  1. There was a while when the MA state lottery was +EV nearly once a month due to jackpot rollovers that boosted the value of the winnings from matching 3 or 4 numbers, and a number of my friends exploited the EV of about 1.6 to 1. I assume by now that this has either been removed or arbed out.

  2. Surely there the positive EV is dominated by the feeling that you’re pulling a fast one.