Matched 5/7 on the Lottery today... :D

[EzExZeRo7497]

Re: Matched 5/7 on the Lottery today...

If you want to gamble, do it in some game that involves any sort of strategy. Go to the casino and play poker or blackjack.

ty

[dAnceguy117]

Re: Matched 5/7 on the Lottery today...

To me, gambling in this way is like, throwing away money. There is some chance you'll turn out making profit, but those chances are too low to consider.

If you want to gamble, do it in some game that involves any sort of strategy. Go to the casino and play poker or blackjack.

whether we're talking about lottery tickets or poker cash games, I think you should go in with the assumption that you will lose money. you shouldn't spend what you can't afford, as with any other form of entertainment.

side note: you can use optimal strategies in blackjack to give yourself the best odds of winning, but beyond that, it's entirely luck-based. poker is different in that regard.

[devonin]

Re: Matched 5/7 on the Lottery today...

A friend of mine from University argued that in order to claim lottery winnings, you should be required to submit an explanation in writing showing that you understand that even having won, it was still a bad idea to play.

Also, I recall a study done a year or two ago that found that something like 30% of Americans consider "Playing the Lottery" to be a legitimate part of their life financial strategy.

The irony of funding education (or claiming to fund education) on the back of a system that preys on ignorance of how math works has always fascinated me.

[Wayward Vagabond]

Re: Matched 5/7 on the Lottery today...

winning the lottery is my financial plan. so far ive spent 24k over the course of 5 years and when i win it will be a small price to pay considering the money that i will be winning

[devonin]

Re: Matched 5/7 on the Lottery today...

If you spend 20 dollars per check, assuming you're paid every two weeks, so 25 paychecks a year, that's 500/year which is, in a 40 year career 20,000 dollars. Statistically, your odds of winning even 40,000 dollars on Powerball (a 100% return on your lifelong investment) are 1 in 648,945

With 2 draws per week, and you playing in every draw (which you don't), it would take you over 6000 years to get that 40k payout, which would have come from an investment of a little over 3 million dollars.

[devonin]

Re: Matched 5/7 on the Lottery today...

And buying a lottery ticket is like, the least exciting way to gamble from an experiential standpoint. I would much rather spend that 40 bucks once a month at a casino at some cheap poker or blackjack table, or even slot machines.

My entire experience with lottery tickets is "I pick some arbitrary numbers, wait a week, and then spend 15 seconds looking in the newspaper to see that I didn't win anything. Sounds fun!

[Reincarnate]

Re: Matched 5/7 on the Lottery today...

Also, I recall a study done a year or two ago that found that something like 30% of Americans consider "Playing the Lottery" to be a legitimate part of their life financial strategy.

I remember seeing something like how many poor families tend to spend like over $600/year (or something like 10% of their net income) on lottery tickets -- a ridiculous waste of money that could be better spent getting *out* of poverty, but unfortunately it's hard to become sufficiently versed in things like math/probability/personal finance when you're poor and uneducated.

The irony of it all? Many winners find themselves right back in poverty within a couple years. They mismanage their money and blow through it all. They become targets for criminals. Social relationships turn to shit, and families are torn apart. Some people commit suicide or get murdered. It's really depressing stuff.

[Reincarnate]

Re: Matched 5/7 on the Lottery today...

IMO expected value/utility is a super interesting concept.

SCENARIO 1

You have $1000. What do you choose:

Option A: 50% chance of earning another $1000, 50% chance of earning $0
Option B: 100% chance of earning another $500


SCENARIO 2

You have $2000 this time. What do you choose:

Option A: 50% chance of losing $1000, 50% chance of losing $0.
Option B: 100% chance of losing $500


Choose what "feels right" to you, then crunch the math and wonder wtf is wrong with your brain

[igotrhythm]

Re: Matched 5/7 on the Lottery today...

IMO expected value/utility is a super interesting concept.

SCENARIO 1

You have $1000. What do you choose:

Option A: 50% chance of earning another $1000, 50% chance of earning $0
Option B: 100% chance of earning another $500


SCENARIO 2

You have $2000 this time. What do you choose:

Option A: 50% chance of losing $1000, 50% chance of losing $0.
Option B: 100% chance of losing $500


Choose what "feels right" to you, then crunch the math and wonder wtf is wrong with your brain

I've seen this one before. Judgment under Uncertainty by Tversky and Kahneman. Fun stuff.

[Reincarnate]

Re: Matched 5/7 on the Lottery today...

I've seen this one before. Judgment under Uncertainty by Tversky and Kahneman. Fun stuff.

Yeah, the expected value in all four outcomes here is $1500, which means they're all "equivalent" on average if you were to play this game over and over and over again.

To those that aren't convinced, I just wrote a quick Monte Carlo simulator:

from random import random

trials=1000000
scenario1A=0
scenario1B=0
scenario2A=0
scenario2B=0

for t in range(trials):
    dice = random()
    if dice <= .5: scenario1A += 1000 + 1000
    else: scenario1A += 1000
    scenario1B += 1000 + 500

    dice = random()
    if dice <= .5: scenario2A += 2000 - 1000
    else: scenario2A += 2000
    scenario2B += 2000 - 500
    
print scenario1A/float(trials)
print scenario1B/float(trials)
print scenario2A/float(trials)
print scenario2B/float(trials)

1500.418
1500.0
1499.092
1500.0

#all four options ultimately converge on 1500, and are exactly 1500 at trials=infinity

In Scenario 1, people usually won't mind going for Option A. There's a chance of earning a lot of money and a chance of being no worse off, so hey, why not take the risk?

But Scenario 2? The idea of possibly losing $1000 scares people shitless, and so many will go for Option B even though they may not lose anything at all if they had chosen A.

[devonin]

Re: Matched 5/7 on the Lottery today...

And yet, according to your numbers, while they do converge at 1500 with enough iterations, 1A and 2B -are- marginally superior choices given the number of iterations you ran :P

[rushyrulz]

Re: Matched 5/7 on the Lottery today...

^

These scenarios seem like a one-time offer, in which I would take 1B and 2B.

[DotKritic]

Re: Matched 5/7 on the Lottery today...

I would go to a casino, but the nearest one is 2 hours away in Louisiana.

[rushyrulz]

Re: Matched 5/7 on the Lottery today...

[PaperclipGames]

Re: Matched 5/7 on the Lottery today...

IMO expected value/utility is a super interesting concept.

SCENARIO 1

You have $1000. What do you choose:

Option A: 50% chance of earning another $1000, 50% chance of earning $0
Option B: 100% chance of earning another $500


SCENARIO 2

You have $2000 this time. What do you choose:

Option A: 50% chance of losing $1000, 50% chance of losing $0.
Option B: 100% chance of losing $500


Choose what "feels right" to you, then crunch the math and wonder wtf is wrong with your brain

The expectation values of all four scenarios are the same, but there are still differences. 1A and 2A are literally the same, as are 1B and 2B. However, the variance of xA is greater than zero, whereas the variance of xB is zero. That is to say, the "swings" to loss/profit relative to the expactation value ($1500) is smaller in option B than in option A. So (of course, depending on the mood of the player), one may legitimately feel "safer" to pick option B.