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I agree, playing the lottery is a little like buying insurance for something. Everyone knows that insurance is a losing proposition, but no one buys it to save
by mym1990 6y ago
I agree, playing the lottery is a little like buying insurance for something. Everyone knows that insurance is a losing proposition, but no one buys it to save 500$ on that fender bender, people buy it so that they can get through a catastrophic event like 500,000$ in medical bills.
- telchar 6y agoI would hazard a guess that people who buy lottery tickets are much less likely to buy insurance than those who don't. I think some similar psychological mechanisms may be at play, but not in the way you are suggesting where they overestimate small probabilities across the board. I suspect it has more to do with discounting odds that are against them. But I wouldn't bet on it.