could the lottery be +ev???

[greatwhite 0]

Read only the first couple of posts, but if you hit the jackpot can't it be split with others? Add in taxes and it's -EV. Although it's -EV it's an amount of money that will change your life forever if you win and will only cost $1 if you lose. Alot of money also goes to helping the state so I don't mind playing the lottery when the jackpot gets big.

[ronnieburger 0]

lotterys are riggedloland after reading all this i now understand that the lottery is +EV for the winner and -EV for the loser...very insightful

[custom36 4]

If I say yes, will you go away?

[Guest XXEddie]

Stick to scratch-off tickets.

ding

[sholden 0]

Why would "greed" make you more inclined to take the package that pays out substantially less money?They're of roughly identical present value. Neither choice makes you greedy. Everyone prefers money of an equal value sooner rather than later. A rational person would prefer 900,000 now to 100,000 a year for 10 years. The ten year payment plan adds up to more in absolute value, but the 900,000 now can be invested along the way and paid out every year identically to how the 100,000 payment streams would be, with the only difference being that you'd have a lot of extra money left over once the ten years finished. .

People aren't ratioanal. Some economists have noticed this, all poker players have :)People often take the worst of it, for perfectly valid reasons. They may, for example, know that if they take the lump sum they will blow through it because they don't have the discipline not to and would rather get less money over more time since that way they can't.

[SuperJon 175]

Why would "greed" make you more inclined to take the package that pays out substantially less money?They're of roughly identical present value. Neither choice makes you greedy. Everyone prefers money of an equal value sooner rather than later. A rational person would prefer 900,000 now to 100,000 a year for 10 years. The ten year payment plan adds up to more in absolute value, but the 900,000 now can be invested along the way and paid out every year identically to how the 100,000 payment streams would be, with the only difference being that you'd have a lot of extra money left over once the ten years finished. .

People aren't ratioanal. Some economists have noticed this, all poker players have :)People often take the worst of it, for perfectly valid reasons. They may, for example, know that if they take the lump sum they will blow through it because they don't have the discipline not to and would rather get less money over more time since that way they can't.

exactly

[KingAustin 0]

Why would anyone take a payment over 25 years? The inflation in the next 25 years is going to kill the payment. I would just take a lump sum, then invest a shit load into some stocks or funds or w/e is best at making money.

One word, greed.It's better to have money coming to you every year then to get a lump sum and one time and risk blowing it all. Let's face it, if you take the 25-30 year payment plan, you'll be making more a year than most people do. There's no point in taking a lump sum if you ask me.

How is this being greedy? I would call it an amazing investment plan. If you blow all of your money by taking a lump sum, thanks for helping the economy. You dont deserve it if you blow it all.

[sholden 0]

Why would anyone take a payment over 25 years? The inflation in the next 25 years is going to kill the payment. I would just take a lump sum, then invest a shit load into some stocks or funds or w/e is best at making money.

One word, greed.It's better to have money coming to you every year then to get a lump sum and one time and risk blowing it all. Let's face it, if you take the 25-30 year payment plan, you'll be making more a year than most people do. There's no point in taking a lump sum if you ask me.

How is this being greedy? I would call it an amazing investment plan. If you blow all of your money by taking a lump sum, thanks for helping the economy. You dont deserve it if you blow it all.

It's not being greedy. It's working against your greed.You know you are greedy. You know that if you get $X up front you will be greedy and buy heaps of crap you don't actually want or need and will end up with nothing left in less than a decade.Hence you take the $X/25 per year for 25 years. Which is by far taking the worst of it, but that way you actually have some money a decade later rather than just the memories of the hookers, blow, and $20k a night hotel rooms.It's using the "wanting more than you can consume" definition of greedy, not the "desiring wealth" definition.

[brian67 0]

If you think that playing the lottery is +EV then you are a moron. The only possible argument for playing the lottery is that it gives entertainment value. It should be seen as nothing more than that though, entertainment.

[princeof56k 0]

The only possible argument for playing the lottery is that it gives entertainment value.  It should be seen as nothing more than that though, entertainment.

I've heard that before, but how much entertainment could there be in spending a buck to pick numbers at random and then miss the majority of the time? Counting the time it takes to pick the numbers, stand in line to buy the ticket, and the watch the winner number selected only to realize you missed, it must be a total of 10 minutes of entertainment tops. You could get more enjoyment from buying a candy bar.If you have no soul, I guess it would be entertaining to watch some guy spend his life savings on lotto tickets when the jackpot gets big, only to lose and see his life in ruins. Actually, that might be the next reality show. Maybe I should give FOX a call.

[garamond10pt 0]

Speaking of splitting, here's a funny story.During one of the Powerball drawings earlier this year, over a hundred people claimed tickets that had matched 5/6 numbers instead of the usual five or so. Turns out that most of them chose the ticket based on a mass-produced fortune cookie's lucky numbers.

[brian67 0]

brian67 wrote:The only possible argument for playing the lottery is that it gives entertainment value. It should be seen as nothing more than that though, entertainment.

I've heard that before, but how much entertainment could there be in spending a buck to pick numbers at random and then miss the majority of the time? Counting the time it takes to pick the numbers, stand in line to buy the ticket, and the watch the winner number selected only to realize you missed, it must be a total of 10 minutes of entertainment tops. You could get more enjoyment from buying a candy bar.

I didn't say that i found it entertaining. I think the whole thing is kind of sad really. The only good that comes out of it is the money that is given to schools.

[Guest Anonymous]

The lottery is surely +EV. It's a lot like chasing a runner-runner flush. There's 205 million in the pot, but it only costs a dollar to call. I raised to 2 dollars and bought myself 2 tickets. Actually it's probably nothing like chasing a flush. It probably has no likeness to poker whatsoever...

This would be true if you were statistically likely to hit the jackpot in your lifetime. If you played for 1,000,000 years, every week, you would eventually be expected to win. But you don't live that long.So to use your analogy. PLaying the lottery every week for a few years is like going all-in hoping to hit a runner-runner flush. It won't happen often enough to create a positive expectation over your sample size.

[Abbaddabba 0]

People aren't ratioanal. Some economists have noticed this, all poker players have  People often take the worst of it, for perfectly valid reasons. They may, for example, know that if they take the lump sum they will blow through it because they don't have the discipline not to and would rather get less money over more time since that way they can't.

If the reasons are "perfectly valid", that's another way of saying it's "rational". There are many circumstances where one doesn't value time equally to the market rate. That's true of most cirucmstances. That's why people invest and borrow quite frequently. You borrow in exchange for paying the market rates, and you invest in order to get the market rate. The other issue is incompetence. People have less than perfect information about investing and the value of money. Their own stupidity causes them to take undesirable courses of action, ie: dismissing taking a lump sum on account of it being "greedy" and foregoing it regardless of it's net present value. That doesn't make them irrational. It makes them stupid. It's no different than if they were blindfolded and incapable of making a sound decision; their own stupidity impedes their well being.

[rog 0]

It's like drawing to a nut low in O8. You cant calculate the exact EV, because you dont know if you're getting quartered or not. Without knowing what your opponents hold, you cant know what your pot odds are. It's actually worse than poker because you cant attempt to put your opponents on a hand, so you cant even really guess what your EV is. The lottery is -EV long term, but may be +EV in certain situations.

You do know the probability of being quartered. Your opponents in the lottery are all holding perfectly random hands.

Fair enough. And how many random hands am I up against?

[rog 0]

A rational person would prefer 900,000 now to 100,000 a year for 10 years.  

This is fine in Canada where lottery winnings are not taxed. If they were, your marginal tax rate would be through the roof on the lump payout. One more variable in the mix.

[Mojo_Yugen 0]

I'm not the first to say it but the lottery is a tax on the stupid. Seen from that point of view, I support it. Less taxes I have to pay (in theory).Funny thing is I'm one of the few people that is a long term "winning" lottery player. I've never bought a ticket, but won $40 on one my manager gave me last year. I'm quitting while I'm ahead.

[rog 0]

Funny thing is I'm one of the few people that is a long term "winning" lottery player.  I've never bought a ticket, but won $40 on one my manager gave me last year.  I'm quitting while I'm ahead.

Freerolls dont count.

[Mojo_Yugen 0]

Funny thing is I'm one of the few people that is a long term "winning" lottery player. I've never bought a ticket, but won $40 on one my manager gave me last year. I'm quitting while I'm ahead.

Freerolls dont count.

I've got $40 that begs to differ!

[mclark340 0]

The only way you can call the lottery +ev is if you get to enter alone. That way you do not have any issue with splitting the pot.Otherwise, once the lottery is at a +ev everyone and their grandmother is playing and then you get the split pot.FYI...the pot is not the listed amount. There are all of the other potential winning combos (less than jackpot).