Hacker News Reader

Comment by ori_b | Hacker News Reader

Here's another thing to keep in mind: Me losing $5 on a lottery ticket has a lot less impact on me than winning $1,000,000.

So, while the expected return is negative, it's only marginally negative. And if I do manage to win, the outcome is hugely positive.

It's not rational, sure, but it's less irrational than you make out.

View on HN

Yup, absolutely. With a $5 investment in a lottery ticket, I can get one-in-tiny odds of becoming a millionaire in the next year as a result. With a $5 investment in starting a business, I can get absolutely, unequivocally, zero odds of becoming a millionaire in the next year as a result. If all you have to invest is $5, the lottery ticket is, sadly, a better investment.

But the average lottery player doesn't spend $5/year on lottery tickets.

Those with a income < $10,000 a year and who play the lottery spend an average of $597/year

table 10: http://govinfo.library.unt.edu/ngisc/reports/lotfinal.pdf

True. And certainly buying more than one ticket for a given draw makes very little sense. One ticket gives you basically all the enjoyment of knowing you might win, which has value even aside from the fact that you might actually win. Beyond that though, all you're doing is spending money with negative expectation.

I always buy two tickets, because I like doubling my odds. Beyond that I don't see the point. And I don't buy until the jackpot becomes larger than the overall odds, making the expected payout somewhere in the neighborhood of 1:1.

> With a $5 investment in starting a business, I can get absolutely, unequivocally, zero odds of becoming a millionaire in the next year as a result.

That isn't necessarily the case if you're resourceful. Someone can teach themselves to code, register a domain for 99 cents, get a Microsoft BizSpark account and have a free server for 3 years, etc. If you want to write apps you're at $125 ($99 for an Apple Developer account and $25 for a Google Play developer account) but that is still far less than most lottery players spend on the lottery each year.

Time is money, as the saying goes. You've still invested a lot more than $5. (I'm not saying it's a bad investment by any means, but there is an opportunity cost.)

I would venture that a large fraction of lottery players have a day job and a family to provide for. To participate in the lottery on top of that schedule takes them maybe an additional minute or two each day. To write apps and become a millionaire takes well over a minute or two. In order to do that, they'd have to give up their ability to provide for or spend time with their family, at least temporarily.

Not sure why you are downvoted. This is a reasonable rationale for playing the lottery.

The other positive is the entertainment in the anticipation that you may win - watching the numbers roll out.

Disclaimer: I don't play the lottery it is a waste of money.

The outcome of winning is positive in the sense of cashflow, but the actual outcome on you is more likely to be negative:

http://www.forbes.com/sites/susanadams/2012/11/28/why-winnin...

So while not winning in the lottery might seem like a bad outcome, in fact you've avoided an even worse one. Which confoundingly means rational winnings maximization strategies (such as picking less commonly chosen numbers to reduce the odds of sharing a prize) in fact make the expected outcome of lottery playing even worse.

Nothing in that article supports your statement that winning the lottery would be a negative event.

All that can really be said is that winning a lot of money doesn't make people much happier than they already were.

Reply on news.ycombinator.com