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Theoretical lottery question
Imagine a lottery. Six numbers, 00-99. To win you must match all six numbers in the right order. There is no limit to the number of tickets that can be sold. You can choose your own numbers or generate them randomly and duplicate tickets are permitted. If a number is drawn for which no tickets have been sold, that number is discarded and another number is drawn so there is always at least one winner and no rollover.
Assume that each ticket costs $1.00 and the lottery pays back 100% of the ticket sales, with the winnings split equally among winning tickets. Also assume that there is no tax liability. Assuming that you have an unlimited bankroll and nothing better to do with your money, how do you maximize your EV? |
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