Finding good bets in the lottery, and why you shouldn’t take them. (English) Zbl 1200.00014
Summary: Everyone knows that buying lottery tickets is a bad investment. But do you know why? You will most likely lose your dollar, but there is a small chance that you will win big. In some lottery drawings, your expected rate of return is spectacularly high. Do you know how to identify a drawing that has a positive expected rate of return? When you find one, how do you decide if it is a good investment? In a sense, such a drawing is a caricature of a typical investment, for which both the risks and the rewards are more modest. In general, how should an investor compare such alternatives? And can the lottery ever be a good investment?
MSC:
00A09 | Popularization of mathematics |
97K50 | Probability theory (educational aspects) |
91A60 | Probabilistic games; gambling |