Shocking! A colossal expected Powerball payout means more people are buying tickets. More tickets being sold means the expected payout is getting even more humongous. So much more gargantuan that it’s worth redoing the expected value calculations I did a few days ago.1
Well, that’s interesting! Looks like the expected value now matches the “investment.”
Of course, there are a couple more factors to consider when determining the true value of such a large winning:
- According to the law of diminishing marginal utility, we might need to discount the expected value by some unknown amount to get a “true” expected value; and
- Any substantial winning can free up time that would otherwise be spent working. In effect, such a large winning would “buy time.”
There’s more on both of these topics in the comments section of a post I wrote about an earlier Powerball drawing.
Just remember, you’re more likely to be struck while lightning, while drowning than to win Powerball.
I’m off to buy my ticket…2 ;-)
- Because I didn’t repeat myself in this post, you might want to go read the earlier post to see what I had to say. ↩
- IMHO, there’s no reason to buy more than one. The first ticket makes winning (barely) possible and increases your odds of winning by an infinite factor (though increasing it by a nearly zero offset). The second ticket only doubles your chances. You’ll have to decide for yourself whether the entertainment value of entering is increased by buying more tickets — if you do, don’t forget the law of diminishing marginal utility. ↩