# I lamely Pit lottery-ticket buyers at convenience stores **URL:** \ **Category:** The BBQ Pit\ **Created:** [April 4, 2007, 8:15pm UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759 "2007-04-04T20:15:33Z")\ **Posts on this page:** 6\ **Page:** 9
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [April 11, 2007, 11:07am UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/161 "2007-04-11T11:07:46Z")
[QUOTE=dmatsch] How is it that the elderly are the ones on fixed incomes and the rest of us schmucks earning _salaries_ are not? [/QUOTE] Well, I suppose you could get a raise, they can’t. ---
**Author:** ![Nava](https://avatars.discourse-cdn.com/v4/letter/n/da6949/32.png) [@Nava](https://boards.straightdope.com/u/Nava)\ **Post date:** [April 11, 2007, 12:31pm UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/162 "2007-04-11T12:31:23Z")
[QUOTE=RedRosesForMe] Is it possible that there’s some confusion here about the quantity of cigarettes purchased? Where I come from, a carton of cigarettes is 10 packs, that’s 200 cigarettes. I started smoking in about 1996, and a carton of name brand cigarettes was about $20. I can’t see how the price could have more than quadrupled in a decade, even if the one was tax-free. [/QUOTE] Over 90% of the price of cigarettes in Spain is taxes. And back when the only company that could sell tobacco was Tabacalera, it was government-owned… One of the things I dislike about working in Spain is the Christmas lottery. Eeeeeeevery single company buys company tickets. Eeeeeevery store, bar, sports association, fan club buys group tickets. Stores give away tickets (based on the amount you purchased) for a “Christmas basket,” whomever got the same number that won the national lottery gets the basket of food goodies. Parishes do the same, but they charge you for the tickets (it’s for charity!). And of course the line everybody uses is “but, what if it wins and you’re the only one who didn’t buy it?” And the thing is, it’s the one prize that’s “traditional” and which has fame outside our borders, but it isn’t even that big! I play lottery sometimes, on a whim (biggest win, 15000 pta on a private-lottery ticket which had cost 100pta). But I like doing it _on a whim_, not because everybody spends a month nagging me to do it 😛 ---
**Author:** ![Indistinguishable](https://avatars.discourse-cdn.com/v4/letter/i/90ced4/32.png) [@Indistinguishable](https://boards.straightdope.com/u/Indistinguishable)\ **Post date:** [April 12, 2007, 7:36am UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/163 "2007-04-12T07:36:17Z")
First off, thanks to **flight** for the welcome. I’ll respond to your post in a bit, though perhaps I should wait for your follow-up on insurance. For now, I’ll just give a small response to SenorBeef’s. [QUOTE=SenorBeef] Buying insurance is essentially a variance reduction measure. **…** Because this process requires organization, effort, and profit, you have to give up some degree of expectation to pay for that variance reduction. The variance reduction is essentially a service, and you rent it with an insurance payment. [/QUOTE] Fair enough. I did mention that risk-aversion was one good reason to buy insurance. It seems a little odd, though, to me, to believe that risk-aversion is rational but risk-taking is necessarily irrational (the very standard wording, of course, works against me. One must keep in mind that risk-aversion is reward-aversion and risk-taking is reward-seeking). > [@](#): > > Lottery, on the other hand, is completely a luxury. Not buying a lottery ticket will not be detrimental to your life in the same way risking going without insurance could be. > > You could argue that the people running the lottery is a service that you pay for, but it’s hard to say you really get the same sort of value for that “service”, especially given that the actual -ev nature of the lottery is so high - often on the order of 50%+. Well, sure, not buying a lottery ticket will never be detrimental to your life, except in terms of opportunity cost when compared to the possible huge beneficial effect you are turning your back on. People aren’t playing the lottery out of fear of the consequences if they don’t, they’re playing out of hope for the consequences if they do. I don’t know why it matters that the lottery is a luxury; you can happily get away with not playing it, sure, but you’re giving up something in so doing, something which you might actually want. And if you don’t think people should want the rewards so badly, I think there’s a burden which falls upon you to demonstrate why they shouldn’t. > [@](#): > > This is true, in some sort of theoretical sense that’s completely detached from reality where we can precisely quantify happiness\*\*…\*\* Yeah, like I said, I have my doubts about the very meaningfulness of cardinal utility/talk of happiness ratios/etc., but it’s a useful approximation to the uncontroversial actual facts, that a gamble changes from an undesirable one to a desirable one at some level of increase in the desirability of the rewards. > [@](#): > > - but you have to wonder how extreme the numbers would have to be to add up to this. For a poor person buying 30 lottery tickets per week, the happiness they’d have to derive from winning the lottery would have to be something like a 600 year orgasm to properly balance out. > > But even if you accept that, you can still question whether the person is rational for having those particular values for what makes them happy. Certainly. I thought this was an interesting and insightful point for you to bring up last time, and conceded it as your best point of attack on the rationality of lottery players. Though, for me to really buy it in full generality, and agree with condemnation of lottery players, I’d need to see it more fleshed out as to just why the happiness valuations necessary are irrational. > [@](#): > > Do you mean to say that someone could rationally accept losing value on the chance of being the beneficiary of variance (that is, winning the lottery) without deriving any entertainment value out of it? Yes, I do, most of my arguments have been in support of this (though see below for my updated viewpoint). Because whether the lottery has losing value or winning value is very much dependent on how you measure value, as illustrated before with the happiness vs. money thing. What’s true is that if you keep playing the lottery forever, probability approaches 1 for it not having been a net positive for you, but this, like I said, holds true of insurance as well, in the sense that it too has negative expected monetary value which will come to dominate in the long run. So this probabilistic long-term analysis doesn’t seem to be enough for condemnation of the lottery, since it doesn’t differentiate between the lottery and insurance. > [@](#): > > I guess I see what you mean - kind of a weird way to think about it though. In a way, the person who doesn’t get entertainment value would strictly be playing the lottery for the monetary aspect, and as a rational person, would understand the long term -ev losing nature of it. > > But I suppose you could make a case for someone’s personal preference valuing the variance itself. For instance - if someone could take their life savings and put them on a roll of the dice - paying 5 to 1 - that would be a completely EV-neutral bet. Variance would be the only factor. A rational person, if their views/preferences/whatever decided on that bet, it wouldn’t inherently be irrational… maybe. > > So what if it becomes 4.99:1? Now you’re losing value very slighty, but the risk of benefiting from that variance might suit your preferences enough to offset the loss in value. Does that change the rationality of it? > > In the same way, a person could accept the loss in value because they believe that the variance itself has some value - the chance to win big, even if it’s a long term loser, has value above and beyond the expectation. > > I’m not sure, though, if I would consider that viewpoint entirely rational. I’d have to think about it. Yeah, this would be getting a thrill from risk-seeking behavior, which I saw as the dual to finding insurance useful for its risk-reduction. When I say I’d like to argue that the lottery could be rational even without entertainment value, I mean purely on the risks and rewards alone, which (though I think I may not have been fully aware of this myself as I was writing out previous arguments) includes the ability to account for risk-seeking and risk-aversion, since they are parts of the risks and rewards. I was thinking this “risks and rewards basis alone” approach was throwing out the ability to consider benefits from fantasizing and “entertainment value”. Though, now, as I ponder it, the ability to fantasize is really just something that arises from the risks and rewards anyway, as is the “entertainment value”, in a way. So I’m not sure the distinction is so important anymore. But, at any rate, my viewpoint is that one could soberly, knowingly, rationally choose to play the lottery specifically because of its particular risks and rewards, without having to harbor any delusions about the exact numbers involved, or be unable to get a proper perspective on them. > [@](#): > > More or less, yes. If you decide not to “gamble” on insurance and lose, you may very well be dead. If you decide not to play the lottery.. well, you just didn’t play the lottery. I basically responded to this above, but you seem to think it important enough to repeat, so I’ll repeat the gist of my response. You aren’t gonna die from not playing the lottery, but you’ll live a boring life if you only act to avoid death. There’s the opportunity cost of what you give up, which can be significant. > [@](#): > > I hope I’ve cleared up what I meant about insurance providing a value to offset the loss of expectation. I understand your points, but I don’t really see the similarities to insurance and lottery that you do. You certainly did clear it up, thanks. It’s all about variance-reduction. But what’s intrinsically good about risk-and-reward-aversion and intrinsically bad about risky reward-seeking? > [@](#): > > That is part of it. Another aspect is that we’re dealing with a hypothetical of a super-rational lottery player which… is probably not very likely. More likely, the person doesn’t fully think through the full consequences of their actions. > > If a person would get a million happiness units from winning the lottery, but their chance was one in a million, every ticket they purchase would be equivelant, in expected value, to one happiness unit. But what if spending the money on something else - a tv, a nice dinner, whatever, brought the person 5 happiness points for the same cost as a lottery ticket? Then they’re losing net happiness by leaps and bounds. And as poor people seem to be the most common lottery players, this scenario I’m guessing would be very common - that a lot more happiness would be provided by that extra $1000 that they didn’t spend on the lottery every year than on the (unlikely) chance to win the lottery. > > So if we have some sort of super rational person who analyzes their personal values and decides that the chance of getting favorable variance overcomes the loss in value, you might sort of have a rational person. But that’s an extreme case. Most people play the lottery without a rational analysis - they don’t really understand what it costs them, and they don’t really understand how unlikely it is that they’d win. I’m not sure why you can leap to these conclusions. What’s inherent about poor people being the most common lottery players that allows you to infer that they’re probably not playing rationally, or that even though the lottery might provide happiness for them, a fancy dinner would be even happier? (I suppose being poor is itself some sort of evidence of poor financial skills…, is that it?) When people toss around blanket assertions like “Most people play the lottery without really understanding the costs and chances”, I want to ask “Cite?”. > [@](#): > > How does this scale, I wonder? If the first ticket was a rational purchase, and the second was a rational purchase - where’s the stop point? Should that person spend every free dollar on a lottery ticket? Well, I outlined a risk-aversion based argument for diversification, and thus for not buying lots of tickets. [I had typed a long thing here about the paradox of decision theory that individually rational one-shot games can be strung into a clearly irrational infinite chain, and described the problem as perhaps a soritical situation, where each new ticket purchase is itself reasonable, though eventually the combined result is somehow unreasonable compared to the start, but deleted it, for fear it would only lead to embarrassment as way too head-in-the-clouds theoretical about this.] But I should say it’s not important to me that the second ticket have the same desirability as the first; I had said it would, if the player were employing purely expected value based reasoning, instead of some more subtle analysis of risks and rewards, but since I don’t really care for purely expected value based reasoning, it’s not important to me that the second be as desirable as the first. > [@](#): > > If I accept the view of the rational lottery player, they’re essentially giving up expectation because they find value in the variance. Don’t think of it as giving up expectation, because expectation is a very poor, scale-dependent measure (happiness vs. money again). Depending on what you’re looking at, they might actually be gaining expectation. And the value isn’t purely in the variance, per se (since there are some variance increases [negative payout lotteries, say] which they’d surely turn down), but in some sort of analysis of risks and rewards which may occasionally happen to favor risk-taking. > [@](#): > > I’m not conceding that’s a rational view - I’d have to think about it - but even if that’s the premise, the more tickets someone buys, the closer they get to the actual expected value. As there are more trials, the variance goes down. > > And so if someone bought 1000 tickets per week, rather than one, their variance would be much lower, and their results would more closely follow their expectation. They’re in it for the variance, but with every ticket purchased, that variance is reduced. > > So the maximum value from that viewpoint would be only to buy one lottery ticket, ever. That’s the maximum variance solution. > > Does that make sense? It’s not necessarily the case that buying more tickets reduces variance. Obviously, when you’ve bought them all, you’ve reduced variance down to 0. And when you’ve bought none, variance is also at 0. So it rises and then falls in the middle, but not necessarily with the peak at 1 ticket. We can measure variance in a million different ways (standard deviation, VARIANCE variance [standard deviation squared], various schemes based off of Shannon entropy, etc.), and depending on how you measured it, the peak would be at a different number of tickets. But, even disregarding all that, like I said, the lottery player isn’t playing purely to increase variance, but just has some method of evaluating risks and rewards in mind, which needn’t be just the “Look at the expected monetary value” method. The method they have in mind could favor buying 8 tickets but not 9, who knows? I just don’t think the method has to be the “Look at the expected monetary value, and maybe also apply some risk-aversion” method to be considered rational, and that there’s room for rational analysis of risks and rewards that condones buying several tickets regularly. ---
**Author:** ![jali](https://avatars.discourse-cdn.com/v4/letter/j/ecae2f/32.png) [@jali](https://boards.straightdope.com/u/jali)\ **Post date:** [April 12, 2007, 4:02pm UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/164 "2007-04-12T16:02:19Z")
It’s not really logical to drink a flavored beverage (soda) when water is available. I don’t get irrationally pissed off at the cola drinkers ahead of me in line. It’s not really logical to drink any type of alcoholic beverage at all since our perceptions are changed by alcohol. I don’t grumble in line behind the beer or wine buyer in the supermarket. I don’t understand the real dislike of lottery players. It’s fun to dream - maybe not at all logical, but it’s fun. Why all the anger? ---
**Author:** ![Justin\_Bailey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/justin_bailey/32/8792_2.png) [@Justin\_Bailey](https://boards.straightdope.com/u/Justin_Bailey)\ **Post date:** [April 12, 2007, 4:08pm UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/165 "2007-04-12T16:08:26Z")
[QUOTE=jali] It’s not really logical to drink a flavored beverage (soda) when water is available. I don’t get irrationally pissed off at the cola drinkers ahead of me in line. It’s not really logical to drink any type of alcoholic beverage at all since our perceptions are changed by alcohol. I don’t grumble in line behind the beer or wine buyer in the supermarket. I don’t understand the real dislike of lottery players. It’s fun to dream - maybe not at all logical, but it’s fun. Why all the anger? [/QUOTE] I think that’s the most sensible thing I’ve seen in the entire thread. And I’m well aware of the fact that my anger has basically prevented me from saying the same thing even though this is exactly how I feel. And all I drink is water. All you pop drinkers disgust me. 😉 ---
**Author:** ![Nzinga\_Seated](https://avatars.discourse-cdn.com/v4/letter/n/b5ac83/32.png) [@Nzinga\_Seated](https://boards.straightdope.com/u/Nzinga_Seated)\ **Post date:** [April 12, 2007, 11:20pm UTC](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759/166 "2007-04-12T23:20:35Z")
> [@](#): > > I don’t grumble in line behind the beer or wine buyer in the supermarket. But they don’t hold up the line for a long ass time. That is _my_ gripe with lotto players. [Previous page](https://boards.straightdope.com/t/i-lamely-pit-lottery-ticket-buyers-at-convenience-stores/398759.md?page=8)