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If a ticket costs $1 and you have a 1 in 10 million chance of a win, any payout larger than $10 million (after taxes) gives a positive expected return. Unwise t

If a ticket costs $1 and you have a 1 in 10 million chance of a win, any payout larger than $10 million (after taxes) gives a positive expected return. Unwise to invest your life savings on a longshot, but still worth buying a few tickets if the expected return exceeds the market rate. I believe the Kelly criterion gets you to an exact percentage of your wealth to spend on tickets.

chii 2y ago
> any payout larger than $10 million (after taxes) gives a positive expected return. and conditional on you being the sole winner too (unless the lottery is guaranteed to only have one winner).
- scarmig 2y ago
  Taxes, too: the government will be taking over a third of your winnings for a big payout.
  - ac2u 2y ago
    depends on the country
SJC_Hacker 2y ago
Discounting the possibility of multiple winners splitting the jackpot, and not taking into account taxes on the earnings.
SketchySeaBeast 2y ago
Sure, if you take the whole population, then each ticket will, on average, be worth more than $1. That doesn't change the odds of my making money back on this. There's going to be a handful of people who massively skew the statistics, but it doesn't mean that for the vast majority of players the odds get any better or that their ticket becomes more winning. Expected return doesn't matter on a ticket by ticket basis when the odds and winnings are so skewed, it creates an illusion of worthiness that doesn't exist for the single player.