If Tax X raises money for education, they will just reduce the allocation to education from the general fund. These divisions end up being artificial in the end.
I don’t think people can really know their personal utility in a reality that they have never experienced. Possibly I am wrong, but possible also that people misinterpret what their own utility would be under unfamiliar hypothetical situations.
The motivation for me to go in the $500mm pot at the office is simply this; if my coworkers win and I’m left out, I will feel like the biggest jackass for the rest of my life. That peace of mind alone is worth $20.
But in the case in which funds for certain causes are isolated, they are also more imune to statewide cuts, etc. So they are not artificial. Particularly in downturns.
What if I started a hedge fund that was nothing more than a lottery…
I take suckers money and give the ‘winner’ less than I took in.
I grew up being able to ball out. I experienced it. It was awesome. I want that again. Everything else is boring.
Look, utilities are different for different people. Some people enjoy getting old and living middle class lives and raising children on a budget. They are very happy. They are content and love their families, and I think that’s great. But I also know that is not what I want. Fact.
How would you differentiate yourself from other existing hedge funds? I hear it’s a competitive industry.
Well… the short answer is that no one would invest in your fund. Which is peculiar, given that many people invest in lottery tickets.
If the fund was available with buy in at insignificant amounts I don’t see why consumers wouldn’t participate.
If you market it as an investment then you would not get investors. Because as the point’s been made those two things are different (not to mention there are investment guidelines).
Ohai, we all agree the probability weighted value is less than the price. We also agree it’s worth it. You are telling us it’s not based on our utilitie curves and therefore we must be irrational. To me, it seems pretty obvious you’re ignoring the fact that utility curves differ which is why our reality doesn’t fit your model.
I joke. But I won’t buy in. However, it’s like a far far far far far far far farfar far far farfar far far farfar far far farfar far far farfar far far farfar far far farfar far far farfar far far far out of the money call option. Yes the chance to win is there, but it’s small.
My man Stormy once said, “A 100% loss is a 100% loss, doesn’t matter the size of the investment.”
Meh, I think if you’re talking about a zero or a 60 million fold return on your capital, and the capital at risk is insignificant to your net worth or standard of living, then it’s a good risk to take even if there is a 99.999999999% chance the option expires worthless. You can argue that it’s a bad trade mathematically and you’re right, but the utility of winning is so high that I would still take the chance.
I’ll agree with you here. I believe there are several studies that show that states who dedicate lottery money to education or senior services or whatever generally reduce the amount alloted to that program in the general fund after the first year of participating in the lottery. BS potentially makes a good point thought that the lottery funds at least enjoy a certain level of protection.
^Yea I play for that reason. I’d be traumatized if my cowrokers won without me
(also i was joking about education funding being a good rational for the lottery)
This.
I wonder if I have a better chance if winning this draw or banging a NFL cheerleader? Yet, I would spend tons more trying to bang the cheerleader.
my 2 cents on this:
My wife buys us a lotto ticket maybe 3 times a year when the pot is really huge and it’s all over the news. We spend maybe $5 each time. The first time she did I thought “god, you are stupid, don’t you realize how miserable the odds are?”. Then she gave me the ticket to check the next day at the corner shop near my work. Now, this is where I realized the value of that lottery ticket. That 5 minutes, where I got up from my desk, headed for the elevator, walked accross the plaza, down the stairs to the shops were electric. You’re buying the opportunity to dream for those 5 minutes. Would I bother going back to work, if so, what would I say to people? Would I tell anyone at all? What would this week be like? What would do with the money? You have those 5 minutes where you have to comtemplate all the “dificult” decisions you are going to have to make as if you’d already won the money. It’s a buzz. It doesn’t make statistical sense to buy a ticket, everybody knows that (well maybe not everyone, but probably everyone on this forum at least). I look at that $5 ticket as having $4.76 of dream value and $0.24 of intrinsic statistical value.
I totally agree. And for 99.999999% of the people out there, it’s the same thing, even if they don’t know it.
Although intrinsic value realistically is far less than 1cent.
Shit I didn’t win. Had a lot riding on this one…