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The Mathematical Case For Buying a Powerball Ticket
HughPickens.com writes Neil Irwin writes at the NYT that financially literate people like to complain that buying lottery tickets is among the silliest decisions a person could make but there are a couple of dimensions that these tut-tutted warnings miss, perhaps fueled by a class divide between those who commonly buy lottery tickets and those who choose to throw away money on other things like expensive wine or mansions. According to Irwin, as long as you think about the purchase of lottery tickets the right way — purely a consumption good, not an investment — it can be a completely rational decision. "Fantasizing about what you would do if you suddenly encountered great wealth is fun, and it is more fun if there some chance, however minuscule, that it could happen," says Irwin. "The $2 price for a ticket is a relatively small one to pay for the enjoyment of thinking through how you might organize your life differently if you had all those millions."
Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."
Right now the Multi-State Lottery Association estimates the chances of winning the grand prize at about 1 in 175 million, and the cash value of the prize at $337.8 million. The simplest math points to that $2 ticket having an expected value of about $1.93 so while you are still throwing away money when buying a lottery ticket, you are throwing away less in strictly economic terms when you buy into an unusually large Powerball jackpot. "I am the type of financial decision-maker who tracks bond and currency markets and builds elaborate spreadsheets to simulate outcomes of various retirement savings strategies," says Irwin. "I can easily afford to spend a few dollars on a Powerball ticket. Time to head to the convenience store and do just that."
I figure the lottery is a tax on stupidity. And if it goes to $500 million I'm easily ten bucks' worth of stupid.
An unchecked lottery ticket in my wallet. That way i am both potentially broke and wealthy at the same time.
Any insufficiently advanced magic is indistinguishable from technology.
Not buying a ticket alone does not leave your chances at zero. There is a miniscule probability that the winning ticket will be dropped in a parking lot and a non-purchaser will find it and claim the prize. The only way to make your probability zero is to not buy a ticket AND ignore all tickets found in the parking lot.
Schrodinger's Ticket?
Mutant Freaks of Nature: "Frighteningly Addictive"
It's buying 2+ tickets that aren't worth the money,
Unless you buy 2 tickets with the same numbers. Which could make sense because if someone else has the same numbers you will get 2/3 instead of 1/2. Even better: buy 99 tickets with the same numbers. Just the face of that other dude who ends up winning 1% of the jackpot would be well worth the $198 investment.
lucm, indeed.
So this woman goes in to church and prays to God.
"God, you know our situation. My husband is in the hospital. I can't find a job. Our kids are hungry. Our house is in foreclosure. We have no money to pay the bills. Please, God, if you would let me win the lottery, all of our problems would be solved."
Lottery comes and goes and the woman doesn't win. So she goes back to church and prays again.
"God, our situation has gotten worse. My husband is home from the hospital but is sick. All of the kids are now sick as well as hungry. The bank says they're going to kick us out of the house. The power and gas have been shut off. Please, God, let me win the lottery so that we can be happy and we will only take what we need to get back on our feet and then donate the rest to the church!"
Lottery comes and goes and the woman doesn't win. So she goes back to church and prays some more.
"God, we're in desperate straits. The police have kicked us out of our home. They bank has taken all of our posessions to pay off the debt. My husband and children are living in the park, but the police have threatened to kick us out of there. Please, God, don't forsake us! Help us by letting me win the lottery!"
Suddenly, she hears a booming voice say:
"Meet me halfway! Buy a ticket!"
Thanks. I'll be here all week.