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It actually depends on the size of the pot. There have been times where there was positive expectancy. [0]: https://uncommondescent.com/intelligent-design/satu

by fny 4y ago

It actually depends on the size of the pot. There have been times where there was positive expectancy. [0]: https://uncommondescent.com/intelligent-design/saturday-fun-when-the-lottery-bet-has-a-positive-expected-value/ https://uncommondescent.com/intelligent-design/saturday-fun-...

Semaphor 4y ago
But that still says you shouldn’t :D > if you could afford to buy several hundred million tickets, the math says you should. I mean, unless you happen to be filthy rich already.
- fny 4y ago
  The article is wrong. You should still play if there's positive expectancy and the money you spent won't be missed (i.e. you won't be ruined.) See https://quantwolf.com/doc/powerball/powerball.html https://quantwolf.com/doc/powerball/powerball.html
  - Semaphor 4y ago
    My reading is different, it’s more "together with the kelly criterion or a weaker version of it, you can say it doesn’t matter if you do". This is still "eh maybe I’ll be lucky" and not "it’s mathematically sensible" because > What it means is that you would have to play the game for thousands of years with the jackpot being greater than 117 million each time in order to realize a positive expected return.
  - okintheory 4y ago
    If any expected value matters, it's utility, not wealth. If you think utility is linear in wealth, you need to check Jeff Bezos' instagram more.
- onion2k 4y ago
  The key to getting rich and staying rich is figuring out how to risk other people's money. If you want to buy millions of lottery tickets, or launch a startup, or start a poker career, or anything really, it's far better to do it without risking your own security. Let other people invest in your venture for a reasonable return if you succeed, but also make sure you some non-trivial amount of equity for yourself so you make a killing if it's wildly successful. This is how most VC backed unicorns have worked. The early investors made a lot, but the founders who mostly only risked their time, energy, and opportunity-costed salary made far, far, far better returns.
LudwigNagasena 4y ago
It may still make sense to play even if your monetary ev is negative. Utility function doesn’t need to be linear.
lupire 4y ago
Are you sure? That article ignores the chance of a split pot, and a positive EV lottery jackpot increases the odds of a split pot by motivating buyers. What lottery was that?
- lesuorac 4y ago
  Mega Millions (which is still in line with your first comment). > [0] The probability of winning Mega Millions

by fny 4y ago

Semaphor 4y ago

But that still says you shouldn’t :D > if you could afford to buy several hundred million tickets, the math says you should. I mean, unless you happen to be filthy rich already.

fny 4y ago
The article is wrong. You should still play if there's positive expectancy and the money you spent won't be missed (i.e. you won't be ruined.) See https://quantwolf.com/doc/powerball/powerball.html https://quantwolf.com/doc/powerball/powerball.html
- Semaphor 4y ago
  My reading is different, it’s more "together with the kelly criterion or a weaker version of it, you can say it doesn’t matter if you do". This is still "eh maybe I’ll be lucky" and not "it’s mathematically sensible" because > What it means is that you would have to play the game for thousands of years with the jackpot being greater than 117 million each time in order to realize a positive expected return.
- okintheory 4y ago
  If any expected value matters, it's utility, not wealth. If you think utility is linear in wealth, you need to check Jeff Bezos' instagram more.
onion2k 4y ago
The key to getting rich and staying rich is figuring out how to risk other people's money. If you want to buy millions of lottery tickets, or launch a startup, or start a poker career, or anything really, it's far better to do it without risking your own security. Let other people invest in your venture for a reasonable return if you succeed, but also make sure you some non-trivial amount of equity for yourself so you make a killing if it's wildly successful. This is how most VC backed unicorns have worked. The early investors made a lot, but the founders who mostly only risked their time, energy, and opportunity-costed salary made far, far, far better returns.

LudwigNagasena 4y ago

It may still make sense to play even if your monetary ev is negative. Utility function doesn’t need to be linear.

lupire 4y ago

Are you sure? That article ignores the chance of a split pot, and a positive EV lottery jackpot increases the odds of a split pot by motivating buyers. What lottery was that?

lesuorac 4y ago
Mega Millions (which is still in line with your first comment). > [0] The probability of winning Mega Millions