Re: the lottery
For someone with an average income the utility value of having $2 is so close to nothing that it is safe to just say nothing. As long as you keep the lottery spending in the $2-20/week range then playing the lotter is correct since losing $104-$1040 a year has a negligible impact on your quality of life. Even though your odds or winning are so low the utility modified value is still greater then the negative impact of wagering.
The problem is that the lottery seems to appeal most to the poor. For them it is a bad decision since with their low incomes $104-1040 a year does have an impact on their life. Arguably though the hope (despite it being unfounded hope) might still make it a worth while endeavour. You'd need to commodity hope and give it a monetary value.
My issue with the lottery is a lack of desert basis. I wouldn't play the lottery even if I knew I'd win.
|