5 ms·

The trouble with mathematical approaches to gambling is that while the expected value is taken into account, the emotional value of a bet is rarely considered.

The trouble with mathematical approaches to gambling is that while the expected value is taken into account, the emotional value of a bet is rarely considered. Take a lottery for example - from an expected value point of view it is of course foolish to play most of the time. But the emotional value to the player - he can spend a few dollars and spend the night imagining what he might do with his winnings. That's good value! With that in mind, I plan to play the martingale next time i go to Las Vegas. I will place a bet of a hundred dollars and rebet until I win a hundred dollars or lose 6300 dollars. When I win I shall enjoy dinner and drinks courtesy of the casino and feel very good 63 out of 64 nights. Once in a while I'll lose $6300 and feel terrible, but emotional value is summed quite differently to expected value, so it won't out weight the wins.

Keegs 4y ago
“The expected value is negative so playing the lottery is silly” also misses that someone looking for a way out of poverty and seeing a lack of alternatives might judge the opportunity cost of his 2 dollars and 5 minutes worth the vanishingly small chance of getting a payout. The choice gets harder to defend the more you play, but I think it’s in bad taste to say lotteries are a tax on people bad at math.
- IIAOPSW 4y ago
  Being in poverty and lacking in numeracy and other educational basics correlate. What you point out is no contradiction.
arcticfox 4y ago
> Once in a while I'll lose $6300 and feel terrible, but emotional value is summed quite differently to expected value, so it won't out weight the wins. I'm not sure I'd trade two months of "free" dinners for one day of getting smacked $6300...! To each their own I guess.
throwaway81523 4y ago
You want to read about the Kelly criterion for that. Russ O'Connor has a good article explaining why the lottery is a bad deal on that basis: http://r6.ca/blog/20090522T015739Z.html http://r6.ca/blog/20090522T015739Z.html

Keegs 4y ago

“The expected value is negative so playing the lottery is silly” also misses that someone looking for a way out of poverty and seeing a lack of alternatives might judge the opportunity cost of his 2 dollars and 5 minutes worth the vanishingly small chance of getting a payout. The choice gets harder to defend the more you play, but I think it’s in bad taste to say lotteries are a tax on people bad at math.

IIAOPSW 4y ago
Being in poverty and lacking in numeracy and other educational basics correlate. What you point out is no contradiction.

arcticfox 4y ago

> Once in a while I'll lose $6300 and feel terrible, but emotional value is summed quite differently to expected value, so it won't out weight the wins. I'm not sure I'd trade two months of "free" dinners for one day of getting smacked $6300...! To each their own I guess.

throwaway81523 4y ago

You want to read about the Kelly criterion for that. Russ O'Connor has a good article explaining why the lottery is a bad deal on that basis: http://r6.ca/blog/20090522T015739Z.html http://r6.ca/blog/20090522T015739Z.html