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Re: Purchasing Negative EV a Good Deal in Terms of the Lottery?
In regards to your post also considered is the proportional relationship to the possible gained benefit of winning. What that proportion is however i dont know. I mean would interest alone over say 20 years at 10% offset the intitial loss? What would be the formula to that? something like:
Cost per try(e.v.)+ (additional monies made because of jackpot) = (Jackpot) Im sure a math person could figure out a formula. The main point is that it is much easier to make money when you have alot of it. What the proportion is, I don't know. But There is a point at which if the additional benefits were great enough it would offset the -ev of the initial investment. I think the cumalative effect is important and is tied into the proportion of the most desired result. I think there is a world of difference between $1 bet and a $200 bet and 200 $1 bets over 2+ years and 1 $200 bet. The other side has to do with the initial investment itself. If one can "afford" the loss and the benefit would give rise to additional benefits thaat are not monetary added it would make it possibly a +ev situation. But if the cost reaches a certain point per try the additional benefits would no longer apply, even though the proportion would be the same. I intuitively feel this is correct but I cant prove it, or dont know how. Edit: After thinking I think it would be because as the cost per try goes up additional negative costs are now added in. I.E. cant afford to take woman out becuase you spent your cash on the lotto would now proportionally offset the additional benefits gained outside of the jackpot itself. |
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