The idea of helping the needy with a billion dollar charitable trust is very appealing I admit. (I would be concerned about giving kids and relatives TOO much money.). But the risk is too great.
Hah! I just had virtually the same discussion with a co-worker. I don’t want to win $1.3 billion, I want to win $20 million. I’m not going to win either of course, but I would never even bother playing at this level of a media circus. I want to remain as anonymous as possible, rather than end up as an easily googleable wiki entry. That would be a nightmare.
One rigorous approach, popular among both mathematicians and professional gamblers, to cope with this effect is to seek
maximum Expectation[logarithm(Total_Wealth)]
rather than
maximum Expectation[Total_Wealth]
I’m afraid those hoping to justify their $2 lottery investment will be disappointed to learn how humongeously large the jackpot would need to be before the $2 investment becomes mathematically sound using this so-called Kelly Criterion.
Still, as Eonwe points out, for many of us the $2 ticket is a far better use of funds than spending it on potato chips. :eek:
There was an article in the local paper today about the Powerball in South Dakota and one interesting point it made was that you cannot remain anonymous here. Some states you can though, it didn’t list which ones.
I can see the appeal of that, certainly. But I look at it from the other way. Will a $20 million dollar winner have the insane media circus that would come from a $1.3B win? No.
But…
- There were three winners last night, netting them each a cool $300M pre-tax. That’s still not the largest single winner which means this media storm will blow over much quicker than would otherwise be expected.
- Unless you are really really good, or very prepared, you’re not going to hide this win from your family and friends. Yes, you’ll have to worry about random psychos. But everyone does. The biggest threat is going to be your cousin’s cousin’s cousin who is now your best friend and his truck broke down.
- It seems strange, but with $20 million, a charitable heart, and poor money management skills, your winnings will go very very quickly. That seems strange, I know. But lots and lots of lottery winners go broke because $100,000 here and there adds up. With $300 million? $900 million? You can set up some very lucrative trusts for everyone you want and STILL have plenty left over for yourself.
I don’t see the problem with it. Sure, winning less might mean less headache, but the benefit of winning is still high enough to offset a lot of trouble. It just means the benefit is less.
But, I mean, with that much money, I hire someone whose job is to handle all the additional downsides for me. They answer my phone calls and forward me the good ones. They set up outside my house and keep people away. They talk to the media for me. Heck, maybe even they pretend to be me (after I’ve gotten the money, of course) and get a stipend.
Not that I’m buying a ticket. My expected value may be higher than I pay, but there won’t be enough repetitions for that to matter.
It would take a hell of a lot of initiative to piss away $300 million. You’d have to really TRY. At least if you were just buying crap for yourself and not trying to save the world or back every harebrained business scheme.
If I won it solo, and lived exactly another 30 years, I would need to spend 60 thousand dollars a day to use it up by the time I doe.
That is a challenge I could have met!
If I had been the solo winner, I would have set myself up like Sheldon Adelson, and announced that I would spend whatever it took to elect the Republican presidential candidate of my choice.
Then I would have had them visit me like they do Adelson, make them sign a “non-disclosure form” that had a tiny clause giving me permission to film and tape the meetings, and extracted all kinds of promises from them.
And then I would have given the tapes to Hillary and Bernie.