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Life is not all about EV. Especially not monetary EV. I own my home. It's an objectively bad investment (my tech stocks sure appreciated more than a home I bou

Life is not all about EV. Especially not monetary EV. I own my home. It's an objectively bad investment (my tech stocks sure appreciated more than a home I bought in 2008 before the crash :) But I like the feeling that comes with owning a home. I go out for dinner. (Well, used to). It's objectively a waste of time and money, but I still like the feeling that comes with it. I play guitar. There's no EV attached to it (in fact, people might pay me to stop ;) but there's still an emotional payoff. The same goes for the lottery. For some people, there's entertainment value in it, despite understanding the mathematics of it. If you've ever played poker for money - unless you're exceptionally good, you paid money to sit around a table in a smoky room. EV is negative, emotional experience is a lot of fun. (Yeah, poker isn't entirely chance, but I promise that unless you're pretty good at it and spent a lot of time learning, it's pretty much equivalent)

fragmede 6y ago
We don't rigorously define a numeric EV on most things in life, but we do assign some notion of fairness. You go out for dinner, but going out for dinner comes with expectations, even if the monetary EV is < 1. Basically that the food won't kill you. Similarly there are certain expectations on the lottery on the practicality of winning - everyone knows the odds are against you, but there's still an expectation that a lucky enough someone can win. A lottery that doesn't have a winner sounds rotten and I don't think you'd eat rotten food from a restaurant, no matter how much you accept that inherent EV of the transaction is negative. There are many, many more words that can and have been written about the psychology of lotteries, but suffice to say, for many lottery players, it's not as simple as "I know that the EV < 1, I'm just playing for the entertainment value".

fragmede 6y ago

We don't rigorously define a numeric EV on most things in life, but we do assign some notion of fairness. You go out for dinner, but going out for dinner comes with expectations, even if the monetary EV is < 1. Basically that the food won't kill you. Similarly there are certain expectations on the lottery on the practicality of winning - everyone knows the odds are against you, but there's still an expectation that a lucky enough someone can win. A lottery that doesn't have a winner sounds rotten and I don't think you'd eat rotten food from a restaurant, no matter how much you accept that inherent EV of the transaction is negative. There are many, many more words that can and have been written about the psychology of lotteries, but suffice to say, for many lottery players, it's not as simple as "I know that the EV < 1, I'm just playing for the entertainment value".