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Comment by parthdesai | Hacker News Reader

Morgan Housel in Psychology of Money talks about this. It does make sense, unfortunately, some of these people are at a point where the probability of them living a comfortable life via winning a lottery is higher than anything else.

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It's a basic result about utility functions really, except it now works the other way around. When any small amount of money just leaves you in more or less the same situation then your utility function stays constant and then increases, meaning it is (locally) convex (as opposed to the usual situation where it is concave).

Hence why in that case the expected utility of a lottery can be greater than the utility of its expected value (which is negative).

I really think its much more about the entertainment value the lottery provides. For most players the utility of playing literally is higher than the cost because of non monetary gains.

I'm skeptical those numbers work out. Winning any amount of $ in a lottery is vanishingly small odds.

Even if true, that would imply ANY probability of a comfortable lifestyle is ~0.

>Even if true, that would imply ANY probability of a comfortable lifestyle is ~0.

That is definitely the case, and it's precisely the point that parent was making.

I think you’re onto something but it’s more immediate than a comfortable life. Somebody focused on immediate satisfaction or surviving the next few days is at a convenience store. There’s something they need/want that costs $10, but they only have $2. If getting that $10 item is all that matters to them at that point and there’s no partial substitute they can get for $2, then a $2 scratch off ticket with a 2% of paying $10 may be the highest utility for their money.

Wondering if this is the same effect which causes people to vote for fringe positions? Because the mainstream options did not work out in the past?

There’s also a consideration for the working poor - they’re surviving at some level of surviving. Most people wouldn’t blink at someone spending 5% on entertainment ($600 a year is $50 a month which is a couple of streaming subscriptions), or donating to a club or church.

For most people who buy a lottery ticket they’re really “buying the dream”.

What are your assumptions for the chances involved here? It seems intuitive that the "harder" options would still be better odds. Did you perhaps means that it _feels_ like their chances are that low for any other option?

I'm still working through the book but that's the whole premise. It'll be impossible for us to rationally and logically relate to what (in this case) they go through. Logically, to us, it makes no sense to buy lottery tickets. But given the circumstances they grew up in, the lack of opportunities that continue to riddle them, they're willing to take that chance since it offers a higher probability of them leading a comfortable life.

How so? I imagine it would need to be a very specific set of circumstances where money is the limiting factor to living well.

I'm pretty sure in a capitalist society having sufficient money is a requirement for living well, even if that is not all that is required for one to do it.

Also when in a capitalist society when big problems come up sometimes the easiest or perhaps only way to solve those problems would be having enough money to solve them.

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