Then neither does buying a movie ticket make sense. Of course it doesn't make sense if you frame it as an investment. But people don't necessarily buy lottery tickets expecting to win and more than you or I sit down at a slot machine expecting to walk away with more money than we arrived with. They buy them as entertainment or a reason to hope or dream for a few days.
walshemj's comment was clearly referring to cases where the expected profit of a lottery ticket is positive ("pot odds are such it does make sense to bet on the lottery"). I'm working from walshemj's assumptions about how risk and benefit should be measured, which is in terms of monetary value.
Not really. The lottery is split up among the winners. When there is a big pot, you get proportionally more people playing the lotto. So, the expected payout to one individual actually drops as the payout rises.
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That depends if the prize is large enough then the pot odds are such it does make sense to bet on the lottery.
1. This basically never happens.
2. Don't compare to letting the money sit under a matress. Insteaad, compare with other investments.
Buying a lottery ticket doesn't make sense when measured purely in terms of profit, even when the expected profit is non-negative.
Then neither does buying a movie ticket make sense. Of course it doesn't make sense if you frame it as an investment. But people don't necessarily buy lottery tickets expecting to win and more than you or I sit down at a slot machine expecting to walk away with more money than we arrived with. They buy them as entertainment or a reason to hope or dream for a few days.
walshemj's comment was clearly referring to cases where the expected profit of a lottery ticket is positive ("pot odds are such it does make sense to bet on the lottery"). I'm working from walshemj's assumptions about how risk and benefit should be measured, which is in terms of monetary value.
It has ocasionaly in the UK on big rollovers for the UK and Euro Lotteries.
Not really. The lottery is split up among the winners. When there is a big pot, you get proportionally more people playing the lotto. So, the expected payout to one individual actually drops as the payout rises.
But you are still making a profit on the ticket
The decreasing marginal utility of money means it doesn't make sense even then.