Mega Math
The Mega Millions lottery payoff recently reached a third of a billion before anyone won. Now it resets at $10 million, or whatever they start at. So why would anyone buy a ticket any more?
I had a friend explain to me how a ticket bought last week and this week are of equal value:
$333 million x 0% chance of winning = $0
$10 million x 0% chance of winning = $0
QED.
posted by LAGuy @ 12:23 AM
8 Comments:
$1 buys entertainment in the form of hope of having an infinitesimal chance at winning big bucks (which is more than you get if you don't spend the $1)
And each year a small handful of winners do turn the what you call the 0% chance into actual big bucks.
$1 is chump change these days- wonder what the states would rake in for $20 tickets?) (I think MA did this with scratch tix and advertised higher chances of winning which worked too well as all the big prizes were claimed before all the tickets were sold but the state continued to sell the tickets anyway)
neg
There comes a point that the jackpot can actually go high enough to make a ticket a good investment. The formula for when it makes sense to buy is [jackpot] x [chance of winning] > [cost of ticket]. I think it happened once for Lotto at around $190MM, but would have to be much higher for Mega.
I think QG is right. A 1 in 100 Million chance of winning is worth 1 dollar if the prize is 100 Million. But as LA Guy notes, a one in a million chance is essentially a zero chance, so it is still not a good investment.
Nevertheless, there is an entertainment value, and that may be worth a buck now and then. For me, however, there is no entertainment value unless technically the value of the card is at or above $1 (otherwise I feel like a chump).
And politically, I think state sponsored lotteries are a crime against the people, a tax on stupidity (the people who spend hundreds on lottery and are behind on their rent). My chance of winning is essentially no great if I buy 1 ticket or 100 tickets. State lotteries should be abolished. But I'll keep playing when the jackpot is over say $140 Million.
Lotteries may seem unfair, but gambling (in particular "numbers") goes on whether the state supports it or not. Making it illegal means you lose all that revenue and the hardcore gamblers are not only still losing their money, but getting involved with unsavory characters who are a lot more likely to break their legs when there's a problem.
The state regulation idea would be true of virtually any crime. Murder might be less costly if the state regulated it.
The argument still applies pretty well to vices (like drinking), which is why it's a mistake to treat them like crimes.
Most societies currently or previously allowed you to pay money to the victim (or their family) to avoid punishment for crimes. It's been rejected by most modern civilizations for good reasons. Victimless anti-social behavior, though, should be a different story. Hmmm, there are way more suicides than murders -- would the suicide rate be diminished if the law confiscated all of your estate? I'm about 2 chapters into "Nudge." Maybe Cass will tell me later in the book.
The problem with the big jackpots is that everyone goes out and buys a ticket -- reducing your chance of winning. (One in a million just became one in ten million.)
I'm waiting for the day when we raise enough lottery income to support enough math education to put lotteries out of businsess. What are the chances?
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