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The rules of the lottery are a bit sparse, but it sounds like a guaranteed pool. The lottery worked like this: (1) If you have Hotel de Ville bonds you can pa

The rules of the lottery are a bit sparse, but it sounds like a guaranteed pool. The lottery worked like this: (1) If you have Hotel de Ville bonds you can participate (if not for the lottery, these were almost free since no one thought they would actually get paid). (2) The pot of the lottery is 500,000 (money from government) + money from selling tickets. (3) An individual can only buy 1 ticket. (4) Each ticket is not worth the same. An individual can buy one ticket at a cost of 1/1000 of the debt you wish to be repaid on. So if you have 1,000£ of debt, you can buy 1 ticket for 1£. (5) You get paid 0.85 * 1000 * cost of your ticket. (6) All tickets sold are put in a wheel of "fortune" [1]. A ticket is picked, the value of the winning is subtracted from the pool. And this process continues until the pool is "in debt" (however, the last ticket is redeemed in full, so in essence it's very likely that the government would have to pay in more than 500,000). This debt does not carry forward into the next pool So looks like Voltaire, and his mates (with help of the notaries that were asked to sell the tickets) were able to buy all the tickets available (and were even able to buy the tickets discounted!) ensuring that they would collect on >500,000 government guarantee. [1] http://www.wikigallery.org/wiki/painting_227105/Claude-Louis-Desrais/Drawing-the-lottery-at-the-Hotel-de-Ville http://www.wikigallery.org/wiki/painting_227105/Claude-Louis...

OscarCunningham 8y ago
This is still very confusing to me. The total amount that the bettors could gain was 500,000 (or just over). This must have been much less than the total value of the bonds, since otherwise the bonds would not have been worthless. So it's not possible for Voltaire and his friends to have made more money than they originally lost by being owners of bonds that became worthless. How did this make Voltaire rich? (Also, the discount that the syndicate got on the tickets should be irrelevant. That money is going into the pool so they're getting it back either way.) EDIT: Aha! Maybe the way it worked it that there was actually another rule. (7) There are only a limited number of tickets available. Many fewer than 1000 times the number of bondholders. Then Voltaire and his friends can profit by buying up all the tickets, since they don't hold all the bonds. Even though 500,000 was a negligible fraction of the total value of the bonds, it was a huge multiple of the value of the bonds held by Voltaire and his friends.
- plouffy 8y ago
  I don't think so. The pool value is 500,000 + sold tickets. So there's no reason for the organisers to limit the number of sold tickets. Since, as the number of tickets sold increase, the pool value increases. As the pool value increases, the number of bonds that gets paid off increases, so less debt for Hotel de ville (bondholders would be paying other bondholders). I think the key is that no one thought Hotel de Ville bonds would get repaid, so their value would be approximately zero (or around about there). So Voltaire could buy all the bonds for cheap. Therefore, rather than there being a limit of the number of tickets available, he controls the number of tickets bought, since him (and his buddies) are the only bondholders and can buy tickets.
  - OscarCunningham 8y ago
    > So there's no reason for the organisers to limit the number of sold tickets. But maybe they stupidly did so anyway? (Perhaps because they only knew how to draw randomly from the number of tickets that could physically fit into a large tumbler.) > I think the key is that no one thought Hotel de Ville bonds would get repaid, so there value would be approximately zero (or around about there). So Voltaire could buy all the bonds for cheap. That would also make sense, but it seems implausible to me that Voltaire would be able to buy up the bonds cheaply after the lottery had already been announced.
    - plouffy 8y ago
      The article mentions records of the results, but unfortunately all I could find is the announcement of the 19th draw (I think the results of the 18th draw are below, but they don't show names) [1]. Looks like you were right and the number of tickets were limited to 20,000 "LE PUBLIC est averti que les Billets de la dix-neuvième Loterie de la Ville, toujours fixés au nombre/ de Vingt mille, depuis & compris le numéro 20001 jusques & compris le numéro 40000, commenceront d'être distribués le Samedi 19 Juin 1762" [1] http://parismuseescollections.paris.fr/fr/musee-carnavalet/oeuvres/dix-neuvieme-loterie-de-l-hotel-de-ville-de-paris-etablie-par-arrets-du#infos-principales http://parismuseescollections.paris.fr/fr/musee-carnavalet/o...

OscarCunningham 8y ago

This is still very confusing to me. The total amount that the bettors could gain was 500,000 (or just over). This must have been much less than the total value of the bonds, since otherwise the bonds would not have been worthless. So it's not possible for Voltaire and his friends to have made more money than they originally lost by being owners of bonds that became worthless. How did this make Voltaire rich? (Also, the discount that the syndicate got on the tickets should be irrelevant. That money is going into the pool so they're getting it back either way.) EDIT: Aha! Maybe the way it worked it that there was actually another rule. (7) There are only a limited number of tickets available. Many fewer than 1000 times the number of bondholders. Then Voltaire and his friends can profit by buying up all the tickets, since they don't hold all the bonds. Even though 500,000 was a negligible fraction of the total value of the bonds, it was a huge multiple of the value of the bonds held by Voltaire and his friends.

plouffy 8y ago
I don't think so. The pool value is 500,000 + sold tickets. So there's no reason for the organisers to limit the number of sold tickets. Since, as the number of tickets sold increase, the pool value increases. As the pool value increases, the number of bonds that gets paid off increases, so less debt for Hotel de ville (bondholders would be paying other bondholders). I think the key is that no one thought Hotel de Ville bonds would get repaid, so their value would be approximately zero (or around about there). So Voltaire could buy all the bonds for cheap. Therefore, rather than there being a limit of the number of tickets available, he controls the number of tickets bought, since him (and his buddies) are the only bondholders and can buy tickets.
- OscarCunningham 8y ago
  > So there's no reason for the organisers to limit the number of sold tickets. But maybe they stupidly did so anyway? (Perhaps because they only knew how to draw randomly from the number of tickets that could physically fit into a large tumbler.) > I think the key is that no one thought Hotel de Ville bonds would get repaid, so there value would be approximately zero (or around about there). So Voltaire could buy all the bonds for cheap. That would also make sense, but it seems implausible to me that Voltaire would be able to buy up the bonds cheaply after the lottery had already been announced.
  - plouffy 8y ago
    The article mentions records of the results, but unfortunately all I could find is the announcement of the 19th draw (I think the results of the 18th draw are below, but they don't show names) [1]. Looks like you were right and the number of tickets were limited to 20,000 "LE PUBLIC est averti que les Billets de la dix-neuvième Loterie de la Ville, toujours fixés au nombre/ de Vingt mille, depuis & compris le numéro 20001 jusques & compris le numéro 40000, commenceront d'être distribués le Samedi 19 Juin 1762" [1] http://parismuseescollections.paris.fr/fr/musee-carnavalet/oeuvres/dix-neuvieme-loterie-de-l-hotel-de-ville-de-paris-etablie-par-arrets-du#infos-principales http://parismuseescollections.paris.fr/fr/musee-carnavalet/o...