this post was submitted on 30 Dec 2024
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Lotterys are usually paid out in annuities where you would get that amount over a period of 10-30 years. However, they also give a lump sum amount which is usually ~half the stated amount and after taxes you could expect to receive 1/3 the stated amount.
Still, it's generally best to take the lump sum unless you have very bad self control and would blow through the money.
Statistics show it's literally best NOT to take the lump sum and that most people have no self control.
The issue is the mathematically best outcome in a vacuum does not take into account the fact that gambling has a negative expected value, and anyone participating in it was already more likely to be really bad with money. There can be a mathematically ideal outcome that is different than the statistically best outcome in real life situations. Probably anyone considering this the mathematically ideal option will work best, but the average gambler the statistically best is.
The expected value of buying a video game is about -$60, but people keep doing it, what chumps!
Some people get pleasure from playing the lottery occasionally. The value of the ticket, to them, is the same as the price. There are gambling addicts and people who buy lottery tickets as a way to try to make money, and they have made an error, but I don't think that's most people who buy tickets, even if it may be who most tickets go to.
I don't think those are even close to equivalent. The enjoyment from video games does not come from a hope of it "paying out." The fun of gambling is usually from the chance of getting a reward. If the reward were not there, would they still enjoy it? Probably not, so they're not just enjoying the act. Sure, there's some dopamine release that's driving the behavior, which is enjoyable, but there are methods to get this with better EV and more rationally.