Expectation values and the common man

[KrazyHorse]

No, I just find it odd that you claim that a lump sum is more "inefficient" than an annuity.

It seems to me as though you're making value judgments as to consumption on an arbitrary basis rather than showing a quantifiable effect.

[Kuciwalker]

It seems to me as though you're making value judgments as to consumption on an arbitrary basis rather than showing a quantifiable effect.

Pretty much, though I think there is a case that, in general, production of mass-consumed goods is more efficient than goods consumed by only a few (economy of scale).

And people investing money poorly is always bad.

[Lul Thyme]

Originally posted by Victor Galis


As long as there isn't a 00 on the wheel, betting on any individual number is a 1/36th chance of winning 35 times your money. At least last I read the rules if 0 comes up, all bets on individual numbers just stay on the board (you don't win or lose). So yeah, technically it's better to bet on each individual red number than to bet on Red. In practice, I think the casino would frown upon it.

There are no ways to bet in Roulette without losing money in the long run...
(not counting cheating like using hidden cameras and betting at the last moment like some ppl have successfully done).

As KH said, you are misunderstanding the rules.
There usually IS a 00 in American Roulette, but that is irrelevant here. The main thing is that you do lose on a 0 which puts you at a loss in the long run.


In fact, betting the way you described, you would get exactly the same average return as betting all on red in most casinos.

This isn't meant in a mean way but I find you a bit naive that you think such a simple procedure wouldn't have been considered by betters and casinos or something...

[Flubber]

Originally posted by Kuciwalker
Remember, one of the requirements for winning the lottery is that you decided to buy a lottery ticket. What does that say about your judgement with money?

A lot if you buy many tickets. I buy lottery tickets occasionally

1. Sometimes myself. Its worth the buck to me for the dioscussion we have about what we would do if we won. Its a silly discussion but the entertainment value exceeds a buck to me.

2. Any time there is a work pool. This is the "not wanting to be left out" situation. I know the math but its worth a buck to me to avoid even a one in a BILLION chance that everyone else at work gets a windfall and I'm the stupid schmuck that didn't participate. Its like insurance in a way (the math doesn't work for the individual on insurance either but if you think of the chance of a win in a lottery the same way as a chance of an insurable loss, the logic could be the same)


Oh and I am excellent with money-- I budget, am saving 20% of every paycheque and am reducing my debt quickly. The fact that I buy a lottery ticket occasionally doesn't change that.


Oh and occasionally I will gamble away50 or 100 bucks or so at a casino. I KNOW the odds work against me but I value the entertainment at a certain price and its a price I am willing to pay

[Wezil]

Originally posted by Flubber


A lot if you buy many tickets. I buy lottery tickets occasionally

1. Sometimes myself. Its worth the buck to me for the dioscussion we have about what we would do if we won. Its a silly discussion but the entertainment value exceeds a buck to me.

I buy a ticket sometimes for the same reason.

2. Any time there is a work pool. This is the "not wanting to be left out" situation. I know the math but its worth a buck to me to avoid even a one in a BILLION chance that everyone else at work gets a windfall and I'm the stupid schmuck that didn't participate. Its like insurance in a way (the math doesn't work for the individual on insurance either but if you think of the chance of a win in a lottery the same way as a chance of an insurable loss, the logic could be the same)

I bought a 50/50 ticket for a draw at a staff party I could not attend. Won the prize.

...Oh and occasionally I will gamble away50 or 100 bucks or so at a casino. I KNOW the odds work against me but I value the entertainment at a certain price and its a price I am willing to pay

'Entertainment' is the key.

[Kidlicious]

Originally posted by Kuciwalker
I'm going to assume that lottery winners generally earn less than average and are probably less educated, too.

I had a couple of econ professors that played quite a bit actually. Obviously they don't invest in the lottery to pay for their kids education.

In any case, is there are reason that arbitrarily redistributing money from a lot of people to one person is a good idea economically?

Economics isn't just about making money.

Do you seriously not understand why someone would buy lottery tickets?

[Kuciwalker]

Flubber - while some proportion of lottery ticket buyers are like you, as I said before I assume a majority are not. This seems a reasonable assumption to me; if you know any reason why it shouldn't be true, mention it.

Certainly, there's no positive correlation between buying lottery tickets and good financial sense. There's no reason arbitrarily redistributions of money should make economic sense. Lump-sum payouts just, in my opinion, exacerbate the problem.

2. Any time there is a work pool. This is the "not wanting to be left out" situation. I know the math but its worth a buck to me to avoid even a one in a BILLION chance that everyone else at work gets a windfall and I'm the stupid schmuck that didn't participate. Its like insurance in a way (the math doesn't work for the individual on insurance either but if you think of the chance of a win in a lottery the same way as a chance of an insurable loss, the logic could be the same)

Insurance is a risk-averse decision, buying a lottery ticket is risk-proclive.

[Kidlicious]

Originally posted by Kuciwalker
Insurance is a risk-averse decision, buying a lottery ticket is risk-proclive.

IT'S NOT AN INVESTMENT DECISION!

[Ogie Oglethorpe]

I suppose then in the extremely unlikely event that one ends up a winner there is no need to collect the proceeds.

Afterall it wasn't an investment decision, that money required to purchase tickets was simply written off at the time of purchase.