assuming you have calculated everything correctly including factoring dilution from other participants, and concluded that the expected value is positive, will you invest all of your net worth and if not, why?
Mobius Striptease Wrote: ------------------------------------------------------- > assuming you have calculated everything correctly > including factoring dilution from other > participants, and concluded that the expected > value is positive, will you invest all of your net > worth and if not, why? its only possible for the EV to be positive buying one ticket. if you buy two, the jackpot would have to be north of $2 or 3 billion.
MattLikesAnalysis Wrote: ------------------------------------------------------- > Mobius Striptease Wrote: > -------------------------------------------------- > ----- > > assuming you have calculated everything > correctly > > including factoring dilution from other > > participants, and concluded that the expected > > value is positive, will you invest all of your > net > > worth and if not, why? > > > its only possible for the EV to be positive buying > one ticket. if you buy two, the jackpot would have > to be north of $2 or 3 billion. That would only be true if you were buying two tickets with the same numbers but that would be pretty silly. But really, having a positive expected value is a pretty arbitrary standard for buying a lottery ticket. There is no practical way to arbitrage the positive EV so what really matters is your expected utility. Put another way, if you win the lottery you will be glad you played regardless of your ex-ante EV.
gamblingeconomist Wrote: ------------------------------------------------------- > > But really, having a positive expected value is a > pretty arbitrary standard for buying a lottery > ticket. There is no practical way to arbitrage > the positive EV so what really matters is your > expected utility. Put another way, if you win the > lottery you will be glad you played regardless of > your ex-ante EV. absolutely - this is what i was getting at. on the contrary you can have a game with infinite expected payoff that is worth almost nothing such as st. petersburg’s paradox.
MattLikesAnalysis Wrote: ------------------------------------------------------- > Mobius Striptease Wrote: > -------------------------------------------------- > ----- > > assuming you have calculated everything > correctly > > including factoring dilution from other > > participants, and concluded that the expected > > value is positive, will you invest all of your > net > > worth and if not, why? > > > its only possible for the EV to be positive buying > one ticket. if you buy two, the jackpot would have > to be north of $2 or 3 billion. What? This makes no sense. If each individual ticket has a positive EV, you should buy as many as possible. Think about it like this, if a bet on a fair coin flip pays 120%, how many would you play? However, to answer the first question, no, because you don’t have an adequate expectation of ever hitting in your lifetime.
I pay my $1 so I can dream about all the cool stuff I would do if I won. To me, that dream is worth $1 every few months (usually when the jackpot gets $180 million +). I can’t dream about the winnings if I never buy a ticket.
gamblingeconomist Wrote: ------------------------------------------------------- > as st. petersburg’s paradox. This reminds me of NNT and Spitznagel’s strategy.
> What? This makes no sense. If each individual > ticket has a positive EV, you should buy as many > as possible. Think about it like this, if a bet > on a fair coin flip pays 120%, how many would you > play? However, to answer the first question, no, > because you don’t have an adequate expectation of > ever hitting in your lifetime. yeah sorry. i wasn’t even thinking when i wrote the above.
LPoulin133 Wrote: ------------------------------------------------------- > gamblingeconomist Wrote: > -------------------------------------------------- > ----- > > > as st. petersburg’s paradox. > > > This reminds me of NNT and Spitznagel’s strategy. This in turn reminds me of some other complicated thing that I’d like to mention that I know.
NakedPuts Wrote: ------------------------------------------------------- > This in turn reminds me of some other complicated > thing that I’d like to mention that I know. Lol, fair enough. I don’t pretend to know their strategy, I should not have written that. I meant to say the distribution of their returns as compared to those of the game or general belief in black swans (ugh) etc. The thinking is similar. The only reason I mentioned it in the first place was as an acknowledgement to gamblingeconomist for posting it because it brought something to my attention, and I learned something new. I really wasn’t trying to make myself look good by pretending to know about complicated isht. (which I don’t even know about) Better?