Re: Is playing PowerBall currently +EV???
 

These numbers make no sense unless we have sample rates.
Not that I disagree with you. [img]/images/graemlins/wink.gif[/img]

Re: Is playing PowerBall currently +EV???
 

Can pro poker players subtract losing Powerball tickets as a gambling loss?

Re: Is playing PowerBall currently +EV???
 

Expanding on this, if you bought all the combinations could you subtract your losing tickets from your jackpot winnings? If this is the case it's definitely +EV for a whole lot of people.

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

[/ QUOTE ]

I LOVE IT! Made my night, thanks

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

[/ QUOTE ]

er. no.

Anyway, the lottery is +utilityEV. $1 doesn't matter to you in the long run, having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect.

The lottery is +utilityEV because of marginal utility. It's -$EV though.

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
[ QUOTE ]
It's not +EV because the odds are so large, you could play a lifetime and never even hope of hitting it. Positive expectation involves having a remote chance, 1 in 146mil is not even close to remote.

Odds of being killed by fireworks: 1 in 20mil
Odds of being killed by dog bite: 1 in 18mil
Odds of being killed by lightning: 1 in 4mil
Odds of being killed in bathtub: 1 in 800k
Odds of being killed in plane crash: 1 in 391k
Odds of being killed in a car crash: 1 in 6k

It looks being killed in a car crash is +EV during a person's lifetime.

[/ QUOTE ]

er. no.

Anyway, the lottery is +utilityEV. $1 doesn't matter to you in the long run, having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect.

The lottery is +utilityEV because of marginal utility. It's -$EV though.

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Bingo. It's -EV. But I play it because I want to and having a bajillion dollars would be sweet.

Re: Is playing PowerBall currently +EV???
 

[ QUOTE ]
The lottery is +utilityEV because of marginal utility. It's -$EV though.

[/ QUOTE ]

No, the lottery is NEGATIVE EUtility because of marginal utility, at least if we don't consider the value of "hope." You've kind of waved your hands through your argument that "having one less dollar will affect your quality of life by approx. zero. Winning the lottery would have a huge +utility effect." Well, how close to zero? And how huge, exactly? These things matter a lot considering that the chance of winning the lottery is incredibly small as well. I could say, "Your chance of winning is about zero, so you're just gonna lose money for sure."

Money has nonincreasing marginal utility for essentially everyone. Therefore, a 1 in N chance of winning $N (with no other prizes possible) has a $EV of 0, but is -EUtility for large N since (1/N) * (U($N)) < U($1). Many people are essentially risk-neutral for sufficiently small N; for example, we may have EU=0 if N=2.

It can still be a rational decision to play the lottery because the utility of fantasy is significant compared to the EU loss from the purely financial aspect.