The good: waking up at 5:30 am full of energy due to the wonderful westbound reverse jet lag after returning from my vacation.
The bad: wasting the reverse jet lag the very next day by reading dumb stuff online until 1 am.
The ugly: blobfish. Also not pretty: the rigor level of this post. This is intended as lighter fare for my western readers recovering from the anti-voting post and my Russian readers recovering from a two week holiday drinking binge.
Walking into the office where I pretend to work while actually spending all day thinking of dumb puns to use on the blog, I was surrounded by colleagues cajoling me to put $10 into their lottery pool for the $1.5 billion Powerball drawing tonight. You can probably guess my take on lotteries from my last post, and also from the simple fact that I write a blog about statistics. This morning I happily indulged in a delicious anti-lottery rant, but at least my coworkers enjoyed a big box of chocolates I brought from overseas while I patronized them (I’ll promptly explain why I did that).
Since WordPress doesn’t support candy sharing (yet?), I’ll spare you the ordeal; instead of sermonizing on “lotteries are dumb” I’ll explore some ways to make the most of lotteries, whether you play them or not.
The saddest thing about lotteries is that my colleagues don’t even play for the hope of being rich, they each play because of the fear of being the only one left out when their coworkers quit and sail to Aruba. If I had one question to ask an employer about company culture I’d ask whether there’s an office pool for lotteries. I doubt that a tight-knit group of rational, savvy people who are driven by optimism instead of jealousy is going to extort each other for Powerball.
What to do in the face of office pressure? The reason I am happy to pontificate on the stupidity of lotteries at work is to credibly commit to never playing. My coworkers aren’t winning the lottery, but even if they did I would feel no regret that I didn’t participate because I know for certain that there was no way they could have talked me into it, especially after I publicly established myself as the anti-lottery guy. If I walk into the office tomorrow and half the people have quit I imagine I’ll get at least a double salary and a corner office, what’s not to like? By pledging to never play I align my hopes with my friends and root for them without even having to buy a ticket!
This optimistic thinking also protects me from getting personally outraged about lotteries. I used to get angry at the government for stealing money from poor, uneducated, desperate people. But the government also gives some money to poor, uneducated desperate people so maybe it’s a wash? Also, politics are weather and more importantly no one asked me so there no sense in wasting outrage on it.
It’s hard to get worked up about my middle class peers wasting money on lotteries either. Is $10 spent on a movie ticket any better? The only truth regarding disposable income is that it will, in fact, be disposed of. Are dead bats a nobler purchase than a lotto ticket?
The argument that I’m most sympathetic to is that lotteries are a waste of hope, draining emotional energy away from “good” fantasies like shepherding the next billion dollar start up. Being the next Zuck is a more fun fantasy, (slightly) more realistic, it doesn’t expire twice a week and it’s completely free! It seems foolish to buy a fantasy for $10 instead of spending 5 minutes conjuring a better one in your imagination. But what about buying comic books to fantasize about being a super hero? We all have wild fantasies, we all function reasonably well despite indulging in them, and ranking these fantasies from admirable to contemptible seems pointless.
If you want to pay a few bucks to buy a couple of days of yacht-dreaming, I won’t judge. I’ll just tell you how to do it better, with numbers!
The reverie of lottery riches works because our brains can’t accurately process tiny or huge numbers. The pleasure of imagining yourself rich doesn’t diminish a thousandfold when the odds of winning go from 1 in a million to 1 in a billion, and it doesn’t increase a thousandfold when the jackpot grows similarly. It makes sense to buy the cheapest ticket possible for the smallest jackpot that’s still life-altering*. The latter is because larger jackpots attract exponentially more participants, decreasing the expected value of a ticket by raising the chances that you’ll have to split the prize with several others. The winners actually win more money when the jackpots are smaller, and who wants to fantasize about sharing money with strangers?
* life altering = making you richer than anyone you are friends with on Facebook. That’s really what you’re dreaming about, aren’t you?
Another reason to play smaller jackpots is the decreasing marginal utility of money: the more money you have the less each additional dollar makes you happy. $40,000 is a lot of money to most people, but not when it’s difference between having $4,501,328,000 and $4,501,288,000. The only thing that increases on the margin with more money is taxes.
The fantasy bubble survives only until the draw itself, so you should buy the lottery ticket as far in advance as possible to maximize fantasizing time. Of course, the government wants you spending as much as possible so draws are frequent and buying tickets in advance is usually disallowed. A tobacco company would never sell you a cigarette that you can enjoy for a whole year, will it?
You can get a discount on the cost of dreaming by committing in advance to flip a coin right before the lottery draw and buying a ticket only if it lands heads. This saves you half the money while not affecting your enjoyment much. Who cares if it’s half of an already astronomically tiny chance? If the coin lands tails, it is only a few minutes before draw takes place and the relief of not having wasted the money replaces the anxiety. A professional fantasizer can buy almost a full year of Powerball dreaming for a mere $50.
If the above examples seem a bit contrived, the important point is that even silly behavior can be optimized. Everyone spends money on fantasies, you can still make smarter purchases. Thinking that a sports car will make women want to sleep with you is no saner than thinking lotteries will make you rich. If you can’t help yourself, you can still find a $9,000 sports car that will make you feel almost as sexy as the $100,000 version.
Two last tips for those who play the lottery tonight:
- Tell everyone you know that you pinky-swear to donate half your winnings to charity. For example, a single Powerball winner might get close to eradicating malaria by herself! Since you’re not actually winning anything, you get free virtue signalling. The upside for humanity is that now you also have a self-image as a philanthropist and are likelier to actually go and donate a (more modest sum) to charity.
- When you come to work tomorrow not having won, consider yourself very lucky. If you make it to the office you probably weren’t hit by lightning twice either, which was likelier to happen than the jackpot. Avoiding both the riches and the voltage makes you decidedly luckier than average!
I’m not ready for a regular posting schedule but Putanumonit will be back before the end of next week. This time, we’re going to Mars!