The PowerBall is over 1.2 Billion now. Do you plan to play?
I have purchased 10 tickets (with the extra dollar) to split with my PhD school office mate (who is now retired to Canada).
Otherwise I play the Florida Lottery every draw. I had started it shortly after it was approved in the 80s. I buy many week's worth at a time every six months or so when I visit my parents.
At work four of us play a pool.
What about you? DO you pay the 'poor tax'?
A library patron regularly plays the lottery. He buys the smaller value tickets in bulk from his favorite spot and has done well with his earnings.
I see lotteries as a tax on the poor, who false hopes for quick gains lead them to participate beyond their resources.
I neither play them, nor accept lottery funded grants in the arts (my state's use of them.)
The New Yorker just ran an article on this:
https://www.newyorker.com/magazine/2022/10/24/what-weve-lost-playing-the-lottery?gclid=CjwKCAjwh4ObBhAzEiwAHzZYU3jlCgkES3r91__x-wpoBYXFwJeAlFUEr9daX9FHTUrIEra9oEXboxoCieEQAvD_BwE&gclsrc=aw.ds
They don't adequately offset school costs where they're dedicated to that, either.
They only benefit the folks who design, make, and sell the garish-looking tickets to retailers.
And I HATE getting stuck in a line at a convenience store where someone's taking 15 min. of my time picking a thousand different tickets, and making me miss my bus.
HATE it.
M.
By not playing, YOUR odds of winning are only slightly less than mine and I have 10 tickets!! (though I am splitting those 10 with my friend). So you are already $30 ahead!
Long ago, when another lottery was big, we had a pool at work. I asked the Dean if he wanted to join. He said, "Any FINANCE professor that plays the lottery should be fired!" I told him that there were already 13 of us in the pool, and asked if he wanted to join us, or IF he wanted to be the dean that needed to hire 13 more people or tell the provost that the next dean will also need to bring 13 friends? "
Even though He TOO was a finance person, he paid the $20 to join the pool!
And what a Pool it was! In the end we split $5000! (we had 4 of the 5 numbers AND a powerball)
I very occasionally buy a single ticket to up my chance of winning from "zero" to "measurable by human science". But I refuse to buy more than one as I think the difference between 1/201,291,338 to 2/201,291,338 is not worth two extra dollars.
Yes I am aware this is not entirely logical.
They say the odds of winning if you don't buy a ticket are effectively the same as the odds if you do buy a ticket. Therefore, I have as much of a chance of winning as most people.
It's interesting that the studies show that people prefer a smaller chance of winning a vast amount to a larger (though of course still not great) chance of winning a more moderate amount — say, "only" a couple of million dollars.
Think of pain and fun, not dollars. The pain of losing $2 with certainty by buying a ticket is low; the joy of winning $1.2 billion is very great for most people, so even a tiny chance makes it worth it.
Quote from: clean on November 01, 2022, 04:26:29 PM
By not playing, YOUR odds of winning are only slightly less than mine and I have 10 tickets!! (though I am splitting those 10 with my friend). So you are already $30 ahead!
Long ago, when another lottery was big, we had a pool at work. I asked the Dean if he wanted to join. He said, "Any FINANCE professor that plays the lottery should be fired!" I told him that there were already 13 of us in the pool, and asked if he wanted to join us, or IF he wanted to be the dean that needed to hire 13 more people or tell the provost that the next dean will also need to bring 13 friends? "
Even though He TOO was a finance person, he paid the $20 to join the pool!
And what a Pool it was! In the end we split $5000! (we had 4 of the 5 numbers AND a powerball)
Finance profs winning at Powerball. Proof that God has left the building:)
Oh, who cares! Just have fun spending your money! Gosh knows I've "wasted" it on multiple streaming services, various books, redundant clothing I didn't much like, etc. and so forth. I don't have much fun going out of my way to buy powerball tix, so I don't buy them, but I probably would have fun winning a billion. And I promise I'd share it with some of you if I win!
How much is a powerball ticket nowadays?
$2, + $1 for the Power play
So three bucks to have a chance, such as it is, to become a billionaire? Or I could buy a bag of Doritos?
More like $3 to have effectively no chance of anything beneficial at all, when you could have at least had a bag of Doritos.
Many people are very, very risk averse at their current income.
Tastes differ. :-)
I buy 1 or 2 Powerball tickets a year. For some reason, any jackpot worth less than about half a billion does not seem worthwhile. I think I understand the odds as well as anybody else, but the opportunity cost to participate is so low that a "what the heck. I may as well" kind of thinking occasionally pervades.
That and the desire to tell them I won't be in because I'm calling in rich. I have the piece of the Australian coast I want to move to. Would find a house I like and give them a ridiculous sum of money to be gone by sundown. "Here's a lot of money. Leave the furniture, just get your ass out of there."
Some might say the Doritos are worse for you than giving your money away.
I'm the same as secundem. I am not one of the poor who get suckered in buying multiple tickets throughout the year, and don't feel any economic pain from it.
FWIW, if you play and pick numbers pick a bunch of primes and/or numbers greater than 31. That way you maximize your expected (less negative) return.
I buy a multi-draw ticket occasionally. One number, good for the next ten draws. I'm an efficient lottery player.
Doritos will just get me fat. Of course, I am already fairly plump. Bought a bag at Cumby's just last week.
I am likely not gonna buy a PB ticket, but the thought of becoming a 'billionaire' is intriguing. I do know what I would do with the money-- buy a nice piece of rural land somewhere, say 100 acres or so, and build a Christian study center, essentially a place to take non-credit courses available to all adults, listen to lectures, run a publishing ministry, etc. One can dream.
NO WINNER!!
Now 1.5 Billion!
Buying a ticket now?
It is a lot closer to being a fair/even money bet now!
Quote from: clean on November 03, 2022, 09:27:07 AM
NO WINNER!!
Now 1.5 Billion!
Buying a ticket now?
It is a lot closer to being a fair/even money bet now!
My understanding is that lotteries generally only pay out less than 50% of what they take in. So, if you mean that buying a million tickets now is more likely to result in closer to 1/2 million dollars in prize money, that may be right, but buying a single (or a few) isn't likely to pay out significantly more than before. (Unless there are more lower level prizes that accumulate as well.)
The odds of winning are 1 in 292 Million. The payoff is now 745.9Million cash value. so on paper, (without taxes) you could start running the machines to print 292 million tickets, pay $2 each, and still make money!
The risks of that strategy are:
1. Taxes will reduce payoff.
2. there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.
Quote from: clean on November 03, 2022, 11:41:06 AM
The odds of winning are 1 in 292 Million. The payoff is now 745.9Million cash value. so on paper, (without taxes) you could start running the machines to print 292 million tickets, pay $2 each, and still make money!
The risks of that strategy are:
1. Taxes will reduce payoff.
2. there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.
Although maybe not with Powerball, I seem to remember an Australian group did this once.
People's decisions about gambling and insurance do not depend on expected values of the payoffs of risk taking, but on expected pains and gains of payoffs.
Some risk I am confronted with by nature [house burns down]. I have no choice but to accept the risk. I am willing to insure even though I have to pay an insurance premium which must cover the insurance company's administrative cost, which makes it an unfair gamble. Premium makes me worse off with certainty. The expected monetary gain is less than the certain premium payments. But there is little pain in paying the premium compared to the pain of having my house burn down.
Voluntarily accepting risk in the form of buying a lottery ticket -- even while you insure your house -- is a result of your feeling little pain for the certain price of the lottery ticket and lots of gain from receiving $X billion times a small probability = lots of gain.
Money isn't everything: Pain and pleasure are! :-)
Quote from: jimbogumbo on November 03, 2022, 12:02:19 PM
Quote from: clean on November 03, 2022, 11:41:06 AM
The odds of winning are 1 in 292 Million. The payoff is now 745.9Million cash value. so on paper, (without taxes) you could start running the machines to print 292 million tickets, pay $2 each, and still make money!
The risks of that strategy are:
1. Taxes will reduce payoff.
2. there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.
Although maybe not with Powerball, I seem to remember an Australian group did this once.
There were several groups including a Michigan couple (https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-retired-couple-won-millions-using-a-lottery-loophole-60-minutes-2019-06-09/) and some MIT students (https://www.theatlantic.com/business/archive/2016/02/how-mit-students-gamed-the-lottery/470349/) who sort of pulled this off with a game called Winfall
Quote from: onthefringe on November 03, 2022, 12:19:27 PM
Quote from: jimbogumbo on November 03, 2022, 12:02:19 PM
Quote from: clean on November 03, 2022, 11:41:06 AM
The odds of winning are 1 in 292 Million. The payoff is now 745.9Million cash value. so on paper, (without taxes) you could start running the machines to print 292 million tickets, pay $2 each, and still make money!
The risks of that strategy are:
1. Taxes will reduce payoff.
2. there are other smart people that may attempt the same thing, and multiple winners (not to mention taxes) will defeat the arbitrage.
Although maybe not with Powerball, I seem to remember an Australian group did this once.
There were several groups including a Michigan couple (https://www.cbsnews.com/news/jerry-and-marge-selbee-how-a-retired-couple-won-millions-using-a-lottery-loophole-60-minutes-2019-06-09/) and some MIT students (https://www.theatlantic.com/business/archive/2016/02/how-mit-students-gamed-the-lottery/470349/) who sort of pulled this off with a game called Winfall
Yeah, the Michigan story is a great one. A triumph of math thinkery!!
Here's the story on the Australian one. They failed in their attempt.
https://money.cnn.com/2016/01/11/news/powerball-jackpot-win-guarantee/index.html
I'm entirely with mamselle here. No. Lotteries, as they're structured, are a net drain on the world's store of happiness.
Let me be clear: I don't think government should be in the lottery business. It's an example of bad public policy. I cannot stop it, however, and occasionally play for the reasons stated above.
QuoteLotteries, as they're structured, are a net drain on the world's store of happiness.
As they're structured, maybe, but maybe not. Virtually all people who gamble are having fun. They feel like doing it, and they harm no one. Let's not be against fun.
There are people who are addicted to gambling, just like there are people who are addicted to heroin. Their problem is that they spend virtually all of their income on the addiction.
I've seen a lovely structure for gambling slots that deter putting all one's cash into the machines: The slots take a long, long time to determine winnings. That's an example of a regulation in a far away country, where the slots are ubiquitous in bars, that makes sense. What's going on is that the expected payoff per unit time is being reduced. That takes some fun out of gambling.
We could still have Las Vegas, but put up a sign that reads: Abandon hope all ye who enter here.
Very few people actually suffer from gambling addiction. Trying to
stop gambling to prevent them from hurting themselves deprives many, many others of lots of fun. And if we did, the industry would move underground -- we'd have expenses on violence and profits instead of tax revenue.
QuoteLet me be clear: I don't think government should be in the lottery business. It's an example of bad public policy. I cannot stop it, however, and occasionally play for the reasons stated above.
As with marijuana and other drugs, tax and regulate, regulate and tax. Just legalize gambling! Competition will keep profit margins low. Government can still collect tax revenue without operating the vice dens. Otherwise the Mafia will do it for us.
ETA: The last bit.
I think, then, we're talking about two different types of people. One type pays their $3 for their lottery ticket and their $3 buys them a nice daydream about what they would do with their millions. And when they don't win, they say, "Well, it was fun having the dream!" And possibly, "That was fun, gonna do this again sometime!"
The second type, if somehow they end up buying a ticket, say something like, "I think I have paid $3 for a pipe dream, and I bet I have wasted my money. It's all kind of a swindle, getting people to fork over their money for nothing. You can bet I've got better uses for my dollars, and I won't waste money again if I can help it."
The second type has had less fun. But enough decisions of this nature and the second type is going to end up with a bigger nest egg than the first type.
Some affluent people may well play the lottery for their $3 shot of fun. All the people I know who play it frequently, however, are people who make a habit of frittering away money in multiple small but ultimately consequential ways, and who are strapped as a result. Playing the lottery may be fun for them, but being hard up is not so much fun. And all of their little decisions are so small that they say "But it's only a $3 ticket! But it's only a [small expense here, small expense there, several dozen small expenses, end result poverty]." Kinda like cigarettes. One won't kill you, but a lifetime of them ...
Hmmm... there is a diff between the degenerate gambler who embezzles large quantities of cash from his employer in order to feed his habit, vs. the small-time problem gambler who spends $100+ a week on scratchies, or other such types of gambling. Most of the latter do not have the 100 bucks to lose, and they and their families do without of a lot of stuff they actually need, in order to feed this small-time addiction.
Another issue with ascertaining who is a compulsive gambler/ problem gambler, and how many people qualify thereas, would be, ahem, getting people to fess up to being such. How do you know your stats are accurate?
Quote from: dismalist on November 03, 2022, 01:34:40 PM
QuoteLet me be clear: I don't think government should be in the lottery business. It's an example of bad public policy. I cannot stop it, however, and occasionally play for the reasons stated above.
As with marijuana and other drugs, tax and regulate, regulate and tax. Just legalize gambling! Competition will keep profit margins low. Government can still collect tax revenue without operating the vice dens. Otherwise the Mafia will do it for us.
ETA: The last bit.
The problem is the cost to the
families of the people with addictions. As far as I know,
no government who allows (or especially
profits from) gambling, drugs, etc. takes any responsibility for the families of the addicts who get destroyed by it.
For the government, that's an incredibly irresponsible and hypocritical stance. Basically they don't want to admit the real costs, and want to show all of the "profit" as easy money.
The reason that lotteries are a 'tax on the poor' is not because it is the entertainment that poor can afford... It is the HOPE that it is their way out of poverty.
How many times have you heard "The only way I can retire is if I win the lottery"? That is not a mindset that is unique.
Even my own lottery pool (with 3 other professors that we play each semester calls the tickets 'the retirement portfolio'. ) In our case, though, it is more a matter that IF we win big we retire immediately, rather than several years.
for many poor people it is their only hope to escape their situation. I spent $30 in tickets for the last draw (and another $30 on Saturday's draw), but that was split with my PhD school office mate who lives in Canada and can not play. It is a small portion of my income, and an even smaller portion of my wealth. Some will play many times their income or wealth on this state sanctioned 'investment'.
Shouldnt the state be sponsoring and sanctioning ACTUAL ways to let people escape poverty like universities? (What is the portion of state funding going to YOUR university? In the last 50 years has it gone up or down?)
Ages ago, when Florida was discussing the Lottery, the 'promise' was that All of the money would go to fund education. And they kept that promise, but even then, as a high school student, I could see through the lie! Yes, ALL Of the money went to Education, BUT the money that HAD been going to Education in the budget was now free to go elsewhere ! The legislature made sure that they did not tie their hands by committing to licking in a certain portion of funding so that the lottery money was a BONUS to education!
At the time I thought that GA did a better job in that the money went to fund the Hope Scholarship program (at least I think that was it). But that soon became viewed as an entitlement, and a leverage against faculty. "You have to give me a B or I will lose my scholarship" (that it was the instructor's duty to inflate grades to keep the money rolling in, and again, there was no reason to lock in the state's portion of college funding, when it was replaced with lottery tuition money, meaning that the administration also had some pressure to make sure that the students got Bs).
Worse, the model was then set that poor people's lottery playing funded upper and middle class families' children's college bills.
So, I agree that the state has perverse incentives structures in the lottery, and that they prey upon the poor. However, I voted against them, and I would vote to end them, if that (never gonna happen) came on the ballot, but as they are here I will play in my pools.
Similarly, I dont drink often, but as it is legal, I do have a cabinet filled with liqueur in case I feel the urge to make an adult beverage.
The bottom line is that the lottery has all sorts of flaws, but not playing wont fix the flaws!
I got my tickets for tonight's big draw!
After this week at work, I was tempted to buy more!
(inter thread alert)
Dont retire FROM something, Retire TO something. But retiring to dealing with hundreds of millions of dollars and the problems obscene wealth can bring, would, I guess be a good enough of a TO .
Another Roll Over!
Will you play this time?
Yes, the odds of being struck by lightning are better, BUT we know that this Lightning will strike next Saturday night!
Quote from: clean on November 04, 2022, 05:47:47 AM
Shouldnt the state be sponsoring and sanctioning ACTUAL ways to let people escape poverty like universities? (What is the portion of state funding going to YOUR university? In the last 50 years has it gone up or down?)
People fond of gambling seem to have higher discount rates, so why you would expect them to be willing to endure years more of schooling before possibly getting a better paying job?
QuotePeople fond of gambling seem to have higher discount rates, so why you would expect them to be willing to endure years more of schooling before possibly getting a better paying job?
Lottery players are not necessarily 'gamblers'. Many in poverty see it as the only escape. It is not 'fun' that they play, it is the hope that they will be rescued from their situation.
Long ago, when I was dissatisfied with my employer, I could tell how the week went by how many resumes were sent. Getting a full time, tenure track position is sort of like winning a lottery in some ways. Now as I am trapped in my current job for another 18 months until I qualify for health care in retirement starting the day I retire, I am trapped here. I still sort of look to see how bad the week was by seeing IF I play an extra ticket or two. By winning, I would either not have to wait even 18 months as I could self fund all health care, or I would guarantee that I had enough to be ABLE to fund retirement.
Let me repeat, gambling is not a problem for the multitudes. The pain of the cost is tiny; the pleasure of the winnings is immense. It's about expected pain and pleasure, not expected dollar value.
People who don't like any tradeoff don't gamble. People who do, do, and at different rates. It is important for everybody to realize that people differ, and that deviants in general are neither dangerous to others nor immoral, impeding their entry into heaven.
Gambling is fun, like alcohol is fun, like weed is fun, like heroin is fun, like sex is fun. Are we going to drive or keep all these underground? Cure is worse than the disease.
One fascinating point that can be raised, Clean, when you say: Many in poverty see it as the only escape. It is not 'fun' that they play, it is the hope that they will be rescued from their situation. I don't know that that's the motivation and it doesn't matter. They feel like doing it. That's all we need to know. [Needn't take offense at the shorthand word "fun", therefore.] The fascinating part is how governments choose to help some poor, in the form of lotteries to obtain "affordable" housing. This amounts to exposing the poor to increased risk, or encouraging them to participate in a lottery. I wish the poor could insure against this kind of help!
Quote from: dismalist on November 07, 2022, 12:26:06 PM
Let me repeat, gambling is not a problem for the multitudes. The pain of the cost is tiny; the pleasure of the winnings is immense. It's about expected pain and pleasure, not expected dollar value.
Too many people calculate the expected value of a lottery ticket and show that it is a bad deal. But as you say, that is not the relevant calculation. For many people the likelihood of becoming a millionaire is zero if they don't buy a ticket and is non-zero if they do. That's the relevant calculation. What is that called in the econ biz?
Quote from: dismalist on November 07, 2022, 12:26:06 PM
Gambling is fun, like alcohol is fun, like weed is fun, like heroin is fun, like sex is fun. Are we going to drive or keep all these underground? Cure is worse than the disease.
There is a difference between legal and regulated gambling and the state actively promoting it to those who are most likely to be harmed. So the analogy holds. As entertaining as it would be to have a state official handing out reefers to my least attentive students, I don't see that becoming policy any time soon.
Quote from: Hibush on November 07, 2022, 03:04:17 PM
Quote from: dismalist on November 07, 2022, 12:26:06 PM
Let me repeat, gambling is not a problem for the multitudes. The pain of the cost is tiny; the pleasure of the winnings is immense. It's about expected pain and pleasure, not expected dollar value.
Too many people calculate the expected value of a lottery ticket and show that it is a bad deal. But as you say, that is not the relevant calculation. For many people the likelihood of becoming a millionaire is zero if they don't buy a ticket and is non-zero if they do. That's the relevant calculation. What is that called in the econ biz?
People differently decide participating in lotteries depending on the
expected value of their utility to themselves,
not the expected value of wealth. [This was invented by Johnny von Neumann in about five minutes, when he had nothing better to do.] Thus, the price of the lottery ticket results in a perhaps tiny loss in utility. The utility gain is whatever it is for you. It can be extremely large!
Not buying a ticket is the decision when the utility gain from winning is small, smaller than the utility loss from paying for the ticket. Such people are called risk averse at their current level of wealth. The limiting case is risk neutrality, where one doesn't care whether to purchase the ticket or not purchase the ticket.
I just used pleasure and pain to avoid the technical term utility. Depends on the idea that people have preferences, not that we're all utilitarians by religion. All is intended to mean the same thing.
Quote from: dismalist on November 07, 2022, 03:24:53 PM
Quote from: Hibush on November 07, 2022, 03:04:17 PM
Quote from: dismalist on November 07, 2022, 12:26:06 PM
Let me repeat, gambling is not a problem for the multitudes. The pain of the cost is tiny; the pleasure of the winnings is immense. It's about expected pain and pleasure, not expected dollar value.
Too many people calculate the expected value of a lottery ticket and show that it is a bad deal. But as you say, that is not the relevant calculation. For many people the likelihood of becoming a millionaire is zero if they don't buy a ticket and is non-zero if they do. That's the relevant calculation. What is that called in the econ biz?
Thanks for the good background on the situation.
People differently decide participating in lotteries depending on the expected value of their utility to themselves, not the expected value of wealth. [This was invented by Johnny von Neumann in about five minutes, when he had nothing better to do.] Thus, the price of the lottery ticket results in a perhaps tiny loss in utility. The utility gain is whatever it is for you. It can be extremely large!
Not buying a ticket is the decision when the utility gain from winning is small, smaller than the utility loss from paying for the ticket. Such people are called risk averse at their current level of wealth. The limiting case is risk neutrality, where one doesn't care whether to purchase the ticket or not purchase the ticket.
I just used pleasure and pain to avoid the technical term utility. Depends on the idea that people have preferences, not that we're all utilitarians by religion. All is intended to mean the same thing.
The winning numbers have been announced after a delay:
https://wtop.com/national/2022/11/powerball-announces-delay-to-record-breaking-1-9b-drawing/ (https://wtop.com/national/2022/11/powerball-announces-delay-to-record-breaking-1-9b-drawing/)
Scroll past ad breaks to read full article. Posted on WTOP 11/8/22
Update: there was a winner in CA! Joe's Service Store, which sold the winning ticket, will get a $1 million bonus. And bragging rights.
I know that for the most part, this topic is like asking vegans if they prefer their steak tar tar rare or well done, but another lottery has broached the Billion Dollar Advertised Level!
I played 7 yesterday (for a total loss) and picked up 5 more tickets for the next drawing.
Anyone else going to play? I know that the probability of winning is not much different if you dont buy a ticket, but neither is the mental exercise of planning how many lives you will ruin with your new wealth!
(Like the provost that thinks that summer pay should be a flat rate of like $2000 per 100 students, and that summer school loses money even at that 'generous' rate!.... so you could offer to let them 'save money' on the faculty salaries by offering each one $3000 NOT to teach any classes and join you on a 'research jaunt somewhere that you could discuss current events with the extra $1000 stipend. This would introduce the provost to the 'revenue side' of the budget... if summer school is losing money, then you will save them ALL of the faculty salary expenses that go with it! (of course if there are no teachers, there can be no students, and no tuition revenue... but the budget should be easy to balance and faculty would get a extra source of income and some recreation!... A win for everyone). And a small drop drop in the winner's financial windfall!
Anyway, I am in! Chime in if you get any tickets! We can all dream together!