How to Win the Lottery

…or rather, why playing the lottery might make sense, depending on your utility function.

I once had a math teacher who proudly proclaimed that she played the lottery every week. She justified this by saying that her ticket had just as much chance to win as any other ticket, and someone often wins, so why couldn’t it be her?

Ignoring the logic here, I do believe that it can be worthwhile to play the lottery, provided that you have a clear understanding of why you play. Here lies a recurring theme: the key to being efficient here is understanding your utility function.

If you’re playing to get rich, you need to be incredibly risk-seeking for this to make sense.

But if you play for entertainment, then it should be treated like any other form of entertainment. Some people like to go to movies, some people like to knit, some people like to play the lottery–all are perfectly reasonable forms of entertainment, and it’s up to you to decide how you want to spend your discretionary income. To each his own.

For myself, I spend far more time and money on miles and points than most would think is rational, but it’s one of my main hobbies, so I think it’s worth it. What sort of things do you do that seem irrational to others but make sense for you?

2 thoughts on “How to Win the Lottery

  1. T-Boone Pickens

    Perhaps she is more rational than many out there. For example: those who fly major carriers with entry level elite status thinking they’ll be upgraded to first class on trans-continental flights. I believe your chances of winning the lottery are higher than that upgrade. 🙂

    Reply
    1. Edward

      I think it depends on what you call a major carrier. I’m pretty sure I’ve been upgraded on a transcontinental US Airways flight as a silver. 🙂

      Reply

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