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This is a perfect example of how the “rational agents” theory breaks down. From a mathematical POV what you do is clearly irrational, yet as a human it is perfe
by elteto 4y ago
This is a perfect example of how the “rational agents” theory breaks down. From a mathematical POV what you do is clearly irrational, yet as a human it is perfectly sensible to do what you do, spend a couple of $$, have a bit of fun and move on.
- sicp-enjoyer 4y agoWhy isn't it "rational" to purchase entertainment products you enjoy? Do you think economists actually rely on the axiom that humans are born with a perfect ability to play logic and probability games?
- feoren 4y ago> From a mathematical POV what you do is clearly irrational The ticket costs the same whether the pot is small or large. For every lottery, there is a jackpot amount at which the expected value of a ticket exceeds its cost. Some lotteries occasionally approach this, even after taxes, although the chance of sharing the pot complicates that. Why is it "clearly irrational" to buy a ticket only when the EV is closer to 1, rather than when it's something like 0.2?