Comments on: A football field covered with M&M’s says don’t waste your money playing the lottery http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/ Human Animals at the Crossroads of Culture, Science, Religion and Media Fri, 20 Nov 2009 06:13:34 +0000 http://wordpress.org/?v=2.7.1 hourly 1 By: Kristy Wendt http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-39137 Kristy Wendt Tue, 05 May 2009 17:11:48 +0000 http://dangerousintersection.org/?p=1605#comment-39137 My boyfriend bought a scratch-off ticket a couple of days ago for one dollar. We scratched off three dog paws in a row, won ten dollars, and ordered crab cakes with dinner. My initial inclination when he'd asked for a dollar to buy the ticket was to yammer off the one about the statistical likelihood of being struck by lightening versus that of actually winning something in the lottery. I was glad I kept my mouth shut because, hey: ten dollars. My boyfriend bought a scratch-off ticket a couple of days ago for one dollar. We scratched off three dog paws in a row, won ten dollars, and ordered crab cakes with dinner. My initial inclination when he’d asked for a dollar to buy the ticket was to yammer off the one about the statistical likelihood of being struck by lightening versus that of actually winning something in the lottery. I was glad I kept my mouth shut because, hey: ten dollars.

]]> By: anti-supernaturalist http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-38315 anti-supernaturalist Sat, 11 Apr 2009 19:37:18 +0000 http://dangerousintersection.org/?p=1605#comment-38315 ** Brother can you spare a buck? The probability of winning the jackpot isn’t enough to declare every lottery game irrational. You need to consider the probability of winning multiplied by the “real” payout -- in other words the expected value of the real payout. Sure it's rational to play: when the expected value of the real payout = $1. I assume that the player is risk neutral. Now assuming that you want "the real" payout to be a lump sum cash-in-hand less taxes, the nominal jackpot must grow to cover discounted cash flows (present value) and those pesky government tax predations. Once the *nominal payout* becomes very large, people flock to buy tickets. Thereby moving towards rational behavior in a game usually for dupes only. A state lottery board could use dynamic pricing -- when the expected value of the *nominal payout* falls below $1, lower the price of each ticket so that it continues (more) rational to play. But, of course, the state bets on irrational behavior and usually wins. anti-supernaturalist ** Brother can you spare a buck?

The probability of winning the jackpot isn’t enough to declare every lottery game irrational. You need to consider the probability of winning multiplied by the “real” payout — in other words the expected value of the real payout.

Sure it’s rational to play: when the expected value of the real payout = $1. I assume that the player is risk neutral.

Now assuming that you want “the real” payout to be a lump sum cash-in-hand less taxes, the nominal jackpot must grow to cover discounted cash flows (present value) and those pesky government tax predations.

Once the *nominal payout* becomes very large, people flock to buy tickets. Thereby moving towards rational behavior in a game usually for dupes only.

A state lottery board could use dynamic pricing — when the expected value of the *nominal payout* falls below $1, lower the price of each ticket so that it continues (more) rational to play. But, of course, the state bets on irrational behavior and usually wins.

anti-supernaturalist

]]> By: Vicktor http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-31968 Vicktor Wed, 24 Dec 2008 15:37:12 +0000 http://dangerousintersection.org/?p=1605#comment-31968 There is another statistic to consider: The odds of winning are 0% if you don't buy a ticket There is another statistic to consider:
The odds of winning are 0% if you don’t buy a ticket

]]> By: Erich Vieth http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-30766 Erich Vieth Wed, 26 Nov 2008 04:18:48 +0000 http://dangerousintersection.org/?p=1605#comment-30766 Kevin: I largely agree with you. Playing the lottery can be a "cheap hope." I probably buy a lottery ticket once per year. I don't expect to win, but it is fun to bring it home and let the kids scratch it off. Truly, I can't think of any significant problem with this approach. It's morally no different than blowing a bit of money on any other form of entertainment. There are some people out there for whom hope is not so cheap, however, because they buy LOTS of lottery tickets when they can't really afford any. Kevin: I largely agree with you. Playing the lottery can be a “cheap hope.” I probably buy a lottery ticket once per year. I don’t expect to win, but it is fun to bring it home and let the kids scratch it off. Truly, I can’t think of any significant problem with this approach. It’s morally no different than blowing a bit of money on any other form of entertainment.

There are some people out there for whom hope is not so cheap, however, because they buy LOTS of lottery tickets when they can’t really afford any.

]]> By: Kevin http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-30763 Kevin Wed, 26 Nov 2008 02:45:28 +0000 http://dangerousintersection.org/?p=1605#comment-30763 Here's the thing: Yes: It is basically pointless to buy a lottery ticket. But that's not really what you're paying for. Think about it. When you buy a lottery ticket, you're paying for a fantasy. Between the time of buying the ticket and checking the numbers (and finding out you've lost) you get to fantasize about what you'd do with the money if you'd won, where you'd travel, what you'd invest in, who you'd help out, etc. All you have to do is pay a dollar and you get a few days to feel hopeful and fantasize. Then you lose and you pay another dollar and get to keep doing what you were doing before. Cheap hope is pretty hard to come by, after all. It might ultimately be naïve to buy lottery tickets of any form, but you could do worse. You could be spending your money on crack or PCP, for instance. And anyways, it's only a dollar. I'd pay a buck for hope--even the cheap, far-fetched kind. Here’s the thing:

Yes: It is basically pointless to buy a lottery ticket.

But that’s not really what you’re paying for. Think about it.

When you buy a lottery ticket, you’re paying for a fantasy. Between the time of buying the ticket and checking the numbers (and finding out you’ve lost) you get to fantasize about what you’d do with the money if you’d won, where you’d travel, what you’d invest in, who you’d help out, etc.

All you have to do is pay a dollar and you get a few days to feel hopeful and fantasize. Then you lose and you pay another dollar and get to keep doing what you were doing before.

Cheap hope is pretty hard to come by, after all. It might ultimately be naïve to buy lottery tickets of any form, but you could do worse. You could be spending your money on crack or PCP, for instance.

And anyways, it’s only a dollar. I’d pay a buck for hope–even the cheap, far-fetched kind.

]]> By: Dan http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-25917 Dan Mon, 29 Sep 2008 20:25:07 +0000 http://dangerousintersection.org/?p=1605#comment-25917 I do win the lottery - the profits pay for my college. So by all means, the rest of you please keep playing, and I'll reap the benefits. I do win the lottery - the profits pay for my college.
So by all means, the rest of you please keep playing, and I’ll reap the benefits.

]]> By: Lee http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-24332 Lee Sun, 14 Sep 2008 02:27:59 +0000 http://dangerousintersection.org/?p=1605#comment-24332 All y'all are wrong. The lotto/powerball odds are 50/50; either you win, or you don't. Simple as that. :) All y’all are wrong. The lotto/powerball odds are 50/50; either you win, or you don’t. Simple as that. :)

]]> By: Jill http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-22146 Jill Sat, 26 Jul 2008 14:21:06 +0000 http://dangerousintersection.org/?p=1605#comment-22146 I am a lottey player. I don't spend much money on it and it has payed out for me. If I choose to spend my money on lottery tickets that is on me. I don't see anything about smokers, they literally burn up there money, and most likely will get canceer later on for it. there are worse things money can go to. I am a lottey player. I don’t spend much money on it and it has payed out for me. If I choose to spend my money on lottery tickets that is on me. I don’t see anything about smokers, they literally burn up there money, and most likely will get canceer later on for it. there are worse things money can go to.

]]> By: Larry http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-14474 Larry Mon, 24 Sep 2007 18:56:52 +0000 http://dangerousintersection.org/?p=1605#comment-14474 I have spent about $20 in my lifetime on lottery tickets. I bought my last ticket in 1998 when I won $10,000 and haven't bought one since. I am one of the few who have actually MADE money off of the lottery. I have spent about $20 in my lifetime on lottery tickets. I bought my last ticket in 1998 when I won $10,000 and haven’t bought one since. I am one of the few who have actually MADE money off of the lottery.

]]> By: The House http://dangerousintersection.org/2007/09/19/a-football-field-filled-with-mm%e2%80%99s-says-don%e2%80%99t-waste-your-money-playing-the-lottery/comment-page-3/#comment-14452 The House Sat, 22 Sep 2007 19:04:19 +0000 http://dangerousintersection.org/?p=1605#comment-14452 Well, Dave & Erich - technically if you waited until the jackpot was already $200,000,000 and dropped 150M on tickets, the jackpot would likely grow significantly (depending on the amount of the ticket cost that goes to the pot)... so the "profit" would likely be considerably larger with only one winner. Except... you buy tickets with your after-tax $150M. Even were you to be the sole winner of a $200M jackpot and had a great tax guy who somehow got you down to 25% tax range... you'd come out even at best. So.. there's still only one winner. Uncle Sam and his 50 children, and numerous fiefdoms spread all over the world. :) Well, Dave & Erich - technically if you waited until the jackpot was already $200,000,000 and dropped 150M on tickets, the jackpot would likely grow significantly (depending on the amount of the ticket cost that goes to the pot)… so the “profit” would likely be considerably larger with only one winner.

Except… you buy tickets with your after-tax $150M. Even were you to be the sole winner of a $200M jackpot and had a great tax guy who somehow got you down to 25% tax range… you’d come out even at best.

So.. there’s still only one winner. Uncle Sam and his 50 children, and numerous fiefdoms spread all over the world. :)

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