There were several “all lottery players are stupid” posts noticed by others as well as myself. Near the end of page 1 or the beginning of page 2 I believe.
That’s what prompted my “crazy” response. I don’t like being called stupid. Gee, I wonder why. And Shagnasty has taken it to a whole different level that I think says much more about him than it does about me.
Aww, crap. Every time I defend someone’s position on general principles, I find rather large bite marks on my backside.
Justin, if you say that this is so, then I won’t question you further. But recognize that you are (by far) the exception rather than the rule.
Although (I can’t quite believe that I’m going to say this), in your defense the general tone of posts #14 and #43 could be inferred to be a general condemnation of any lottery purchases and the intelligence of the player, rather than what might be considered excessive lottery playing. Those posters clearly feel that any lottery purchase is excessive, and that is where I will disagree.
Point taken. However, I’ll agree with delusional, but not stupid; I’d substitute compulsive instead. There are some very intelligent people who get sucked into gambling. OTOH, it’s hard to get that compulsive over a cup of coffee.
I’ll quibble. The state would condone it if they got their cut, or at least if some pol got greased. How else do we explain the laws against usury while welcoming credit card companies with their 20+% interest rates?
That’s what I’m talkin’ about! 
Hardly. You had it right at first. In my first post (#43 that you mention) I specifically stated that the first ticket buys the fantasy, the rest are just silliness. Perhaps some people took that to mean once in a lifetime, but that is an odd reading of the post.
Lets take the first half of the last sentence first. I have been more condemnatory of you than I would of lottery players in general, but that is mostly because you have acted in such a nasty and irrational manner in your posts in this thread. As I have said, buy a ticket if you need it to fantasize, but don’t expect to win*. That particular point is one I have had no problem with. It is that second, or third, or fortieth ticket you** buy at a time that is stupid. While I don’t have a problem with buying the occasional ticket for fantasy purposes, you*** do seem somewhat delusional about your odds and I am frankly quite skeptical**** about your reported win/loss ratio. As has been said, people don’t tend have a good perspective on these things unless they actually write down every purchase and how they did.
Now for the first part of the above quote and the last part of the last sentence. First, many of the things you quoted are not superficial, but tangible and of obvious benefit. This would include food/groceries. Everyone needs to eat and everyone has different tastes, so it is expected that some people will not like what you eat. Thus it is stupid to compare a basic necessity of life to a frivolous expense with no tangible benefit.
Lattes, beer, weed, and cigarettes are closer to a reasonable argument, but still not there yet. They are all ingested substances that significantly alter the body’s chemistry. None of them are necessary, but all (for the people who go for them) provide a distinctly pleasurable and tangible effect. Again, not really comparable to the intangible benefit of enabling fantasies.
With porn you actually have the beginnings of a decent argument, but you seem to have hit that with a shotgun blast at justification rather than any sort of logical reasoning. Blind squirrel and all. With porn you are providing something to fuel your fantasies and produce pleasure, much the same way that that first lottery ticket helps you to think about what you will do with your millions. Buying several lottery tickets would be the equivalent of buying more porn than you could ever watch in the hopes that the actresses will magically jump out of the magazine to pleasure you in real life.
Now, I have ragged on you a bit more than you may deserve based on your stated rate of playing because of your attitude and because of your financial justifications of your hobby. You don’t really seem to accept that you will lose over time, but rather that you have, and by my impression of your state of mind, will continue to have a net profit. This is most likely (but not absolutely) delusional regarding your past and just silly with regard to the future.
*Win significant money, not a couple bucks here and there. As I said, no one fantasizes about winning $2.
**General you, not Justin_Bailey specifically.
***Justin_Bailey specifically.
****Skeptical in the prosaic sense, rather that the technical definition (in case Liberal is reading).
When do I do that? I’m very aware that I won’t win all the time, but I believe I have good luck with lottery, so I continue to buy them. Again, you can act like a condescending prick all you want, but you’re still very wrong.
Why the fuck not? Winning anything is fun and expecting to win the big money is crazy. Winning little amounts is EXACTLY what I hope for.
And, for the last fucking time, I am acting this way because so many people feel the need to insult lottery players (all of them, regardless of what they spend) just because they think they’re better than lottery players.
Sorry. I am posting at work, and got a little lost…I see I wasn’t the one to say I have nappy hair and am proud. But I DO! And I am proud that I have the kind of hair that can get nappy.
Oops. wrong thread. Ignore me and my kinky fro! I really am lost!
Well now I understand why we were having a disagreement. I was making assumptions about you that are completely baseless. You are… unique.
By the way, after those requests for rebuttal on your arguments, I expected some sort of response to why I considered them so inapt and inept.
Just as long as you don’t try and buy any lotto tickets here. We don’t want you holding up flamefest, mister!
Of course, in the long run, if you keep buying lottery tickets, the odds approach 1 that you’ll end up somewhat worse off than if you never played the lotto (though there are small chances of ending up astronomically better off), and it is to be hoped that players would understand this. But then, it seems to me the same is true of purchasing insurance; insurance is a business just like the lotto, and so it needs to be designed so that the expected value of purchasing insurance is a positive to the insurance company (and thus a negative to the insurance purchaser). So, for those, if any, who feel that way, why is playing the lottery necessarily a stupid decision (“you lose money… even when you win”) while purchasing insurance is, presumably, not so stupid?
Indeed, on an expected value basis*, playing the lottery might even be wholly rational, going by the expected value for one’s happiness rather than the expected value of one’s money, as long as the appropriate sort of non-linear relationship holds between happiness and money. For example, maybe a man’s happiness doubles with each dollar he makes, being equal to 2^M, where M is the amount of money he owns. Then a (contrived but reasonable enough) lottery with half a chance of losing him two dollars and half a chance of gaining him one dollar would be a losing game in terms of expected shift in money (-$0.50), but always a winning game in terms of expected shift in happiness (at a time when a player has M dollars, the expected happiness shift from the lottery would be +M/8).
It basically seems to me the most common and glib argument against the rationality of playing the lottery is based off the negative expected monetary value. But, because of the above two points, I don’t think this is enough to really condemn it. I’m not saying it would be intelligent to sell your house and gamble the proceeds, or anything. But as to the sort of person who spends a small and affordable amount regularly on lottery tickets, even if we can all reasonably tolerate this as harmless frivolity, must we also consider it necessarily irrational frivolity? I don’t think so.
*: As it happens, I have my doubts in the general case about the meaningfulness of cardinal utility, and thus the application of expected value reasoning to decision-making. (You could say I’m skeptical of the utility of cardinal utility and the value of expected values). But I’m pushing that all to the side for now.
Well spoken, Indistinguishable. In my opinion, that was the second wisest post in this thread, second of course to:
Sorry, Nzinga 
Thanks, Long Time Lurker. Which, as a new poster, I suppose I am obligated to mention I am.
Just to pedantically correct a minor point from my previous post, I had said “the odds approach 1”. By “odds”, I meant, as should be clear from the context, “probability”, and not the technical term odds .
The lottery is a luxury with an extremely unlikely impact of ever positively affecting your life.
Insurances are generally designed to prevent unexpected, catastrophic losses that are far more likely to affect one’s life (car crash, medical problem, etc) than it is likely that one would win the lottery.
Strictly looked at as a gamble, insurance is, indeed, -EV, for most people (not everyone - improperly assessed high risk people might find insurance +ev) but it provides utility. You are guarded against life-shattering financial situations that you would otherwise not be able to financially meet. That utility provides value - and so in exchange for the money you lose on the expectation on your monthly insurance payment, in return, you receive a valuable service. So, essentially, the lost value of an insurance “bet” is payment for services rendered. Not so with the lottery, where lost value is simply lost value.
This is true, but you could also say that in some utilitarian manner, if someone got huge thrills in life by burning stacks of hundred dollar bills, then that’s a +ev decision for them. But you can still question the rationality of it.
And that’s sort of the point I was making earlier - if it makes somehow happy to buy a lottery ticket, for the fantasy value, or whatever, then the added happiness can offset the loss of value. But is it rational for that second lottery ticket to have the same happiness value? If the magical fairies are sprinkling their dust on you, or you have some numerology system, or whatever, you should only need one ticket, right?
When does buying tickets become irrational? Two tickets? 10? 1000?
That was my point - I don’t pass judgement on people who throw away a little bit of money on the lottery here and there. But the people who buy 20 tickets a week, or get lucky and win $100 and then buy 100 tickets?
I don’t find what you’re saying unreasonable or anything, SenorBeef, but I’m not convincingly swayed from my lottery apologetics. To some extent, I am perhaps just arguing useless academic points from the ivory tower, but that is my nature.
Do you think we can say “Insurance is more likely to be good than the lottery, therefore it’s better” and just ignore the actual monetary rewards and prices attached? I wouldn’t think that’s how most people approach it, which is why I looked at the expected values involved, but perhaps your approach is different.
The catastrophic loss aspect is indeed the big key to why people buy insurance, I agree; on a strictly monetary basis, it doesn’t seem worth it, but the happiness loss from scrambling to pay for medical services outweighs the happiness loss from having to pay for insurance, to an extent greater than would be predicted if happiness just scaled linearly with money. (Also an element: positive utility of risk-aversion [i.e., of reducing variability and increasing certainty]). But, then, there could be a “catastrophic windfall” aspect to playing the lottery too, for the right sort of person, in the right sort of mindset, for whom winning a hajillion bucks really would be the sort of nirvana-esque bliss that would make it all worthwhile, more than compensating for the likely insignificant losses. (Also conceivably an element: positive utility of risk-taking [the thrill of gambling] and, as you mentioned, of the fantasizing it enables, though I’d like to say the lottery could be rational even for one who derived no entertainment from the process).
In what, precisely, is the utility of the insurance located? The reduction of uncertainty, specifically, or just in the fact that the loss of money you might suffer without insurance has such a huge effect on happiness as to overpower the insignificant loss from paying for insurance, or in something else? And could not the duals of these provide utility too to players of the lottery [people enjoying risk, or feeling, dually to “Going near-broke is awful, just awful”, that “Breaking the jackpot is awesome, just awesome”]?
(I’m not asking these questions to be rhetorical and snarkily back-handed; I’m genuinely not clear on and curious about what it is that you’re pointing out here as justifying your last two sentences, about the lost value of insurance being redeemed, but the lost value of the lottery being simply lost)
It would seem that at least associating increasing happiness with increasing money (and other goods) should do a lot to shield one’s “happiness function” from derision as irrational, but your point here is pretty good; even if a person did genuinely get ridiculously large thrills out of certain things, I guess we can still criticize them as ridiculous, and call irrational the very fact that they feel so happy about those situations. This seems to me the best line of attack on the rationality of the lottery-player’s action: not that isn’t in accord with their happiness, but that, if it is, their very views on happiness are warped.
Well, like I said before, I hoped my arguments from my last post could attempt to show the conceivable rationality of playing the lottery, even if one derived no thrill from the process itself; i.e., rationality on the risk-vs.-reward basis alone.
Well, the rational lottery player, in my account, is not in it because of delusions about magical fairies and inflated chances, but rather knows the odds and still finds it worthwhile. So to him, yeah, that second lottery ticket might well be worthwhile; it increases the odds of winning just as much as the first.
I suppose the only account I can come up with for why buying a few tickets on risk-vs.-reward basis might be rational, but buying lots might be irrational, is the “don’t put all your eggs in one basket” response: people should have some risk-aversion at low levels of money, I suppose, and thus diversify their portfolios, so to speak. And obviously the risk/uncertainty goes up with the number of tickets bought. But this then is also a good argument for the anti-lotto crowd, to suggest that one’s risk-aversion in those situation should, for some reason, be so large as to preclude even purchasing small numbers of tickets. So… food for thought for me (and hopefully I’ve provided some food for thought for others as well).
Well shit, I certainly didn’t expect a Great Debate to spring from this thread.
NOBODY expects Great Debates. Our chief weapon is surprise. Surprise and facts.
Facts?
We don’t need no stinkin’ facts.
What we need is a winning lottery ticket.
Interesting post, Indistinguishable, let me look at it out of order if you don’t mind.
This phrase made me chuckle. I think the problem is that you are attempting to rationalize an intrinsically irrational decision.
I agree that there is a potential for an individual’s Personal Pleasure Function (PPF) to skew so highly that money spent on the lottery is so little valued and money won is so highly valued that it makes sense to purchase many lottery tickets. I also think that the coefficients in order to make the math on that work out would have to be so extreme as to be considered pathological. I think it is likely people have a model of their own PPF in their head that they use, without consciously realizing it, when making their lottery purchase that is significantly off of their real PPF. They may be able to gauge how much they mind losing (likely, since they will lose fairly regularly) and winning (less likely, since it would be very rare to win anything significant enough to get a good handle on this), but I think they do not internalize the odds of winning vs losing. Without that last bit of information it is impossible to be able to rectify these numbers into an accurate PPF, and people are notoriously poor at gauging risk. This leads them to make what are poor choices for them.
I will address the interesting question of insurance later. Thank you for joining this thread, it is nice to see some rational arguments against my side.
On Edit: And welcome to the boards, I hope you stick around. Play the lottery and it is virtually certain you will win enough for the registration fee within the first couple hundred tickets.
How is it that the elderly are the ones on fixed incomes and the rest of us schmucks earning salaries are not?
That is one of the finest points I have heard in quite a while and very true in the vast majority of cases. I am going to use that at every opportunity from now on. Hell, my family and I have just gone on a “fixed income” in hushed tones because I just figure out where to get anymore right now.
I should’ve stated it a different way. My point wasn’t that the different likelinesses inherently made them different.
It’s a little too dry and theoretical to talk about this in terms of relative levels of happiness.
Buying insurance is essentially a variance reduction measure. You might live a life without having anything worse than a cold, and therefore require no real medical expenditure. You might never crash a car in your life.
Or you may get cancer and die, without insurance. You might total your car, be broke, and lose your livelihood.
Most people aren’t content to leave things that would completely destroy their lives (and even end them) up to random chance like this.
Insurance is a method for reducing the variance on these risks by spreading the costs over a large group. 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.
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%+.
This is true, in some sort of theoretical sense that’s completely detached from reality where we can precisely quantify happiness - 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.
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? 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.
I’m really rambling now so I’m not sure if I made much of a cohesive point.
As I said, it’s essentially paying for variance reduction. You could say “Well, I’ll take the chance on getting cancer and dying” and not buy insurance (high variance) or take the insurance, and risk never needing it, but not risking catastrophic loss if you do. Going uninsured is a high variance bet - you may benefit from never paying insurance if you spend your whole life healthy, or you may die. So much variance that paying for the service of reducing that variance via the loss of expected value inherent for most people in insurance premiums is worthwhile.
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.
This sounds more like a compulsive gambling disorder than what most people would consider rational.
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.
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.
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?
It seems to me that every additional purchase has less value.
If I accept the view of the rational lottery player, they’re essentially giving up expectation because they find value in the variance. 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?