Lotteries are rational for the same reason that insurance is rational. Insurance on the face of it is irrational -- insurance companies make money, therefore b

Lotteries are rational for the same reason that insurance is rational. Insurance on the face of it is irrational -- insurance companies make money, therefore buying insurance is paying a premium above what the expected reimbursement is over the lifetime of the insurance. It's a reverse lottery; the expected outlays exceed the expected returns. What you pay the premium for in insurance is to reduce downside variance. What you pay the premium for in a lottery is to increase the upside variance.