you're occupying your valuable brain with a fantasy whose real probability is nearly zero - a tiny line of likelihood which you, yourself, can do nothing to realize.
I have fantasies where I have superpowers and join the X-Men. I fuel these fantasies by reading comic books -- they cost a lot more than a dollar and it takes me much less than a day to read each one, so in this way, fueling my superhero fantasy is even stupider than fueling a millionaire fantasy by buying the occasional lottery ticket. And the likelihood of the superhero fantasy coming true doesn't just approach zero, it actually is zero. Does that make reading comic books a form of self-destruction? If not, how is it different from buying a lottery ticket every so often? What about sexual fantasies about getting with Jamie Bamber or Felicia Day--are these stupid and self-destructive too, or are they just harmless and pleasant indulgences?
The idea you lay out here--that the lottery-ticket fantasy would necessarily crowd out other, more realistic ideas for wealth generation--seems contrary to the way brains actually work. If the lottery-ticket fantasy fires often, wouldn't that strengthen rather than inhibit the areas where related information is stored? (i.e. the daydreams of "going to technical school, or opening their own business, or getting a promotion at work.") Don't related cognitive activities reinforce each other rather than crowd each other out? I'm not talking about addiction--I'll freely admit that's self-destructive--just about the value of engaging in fantasies "whose real probability is nearly zero," or even fantasies where the real probability actually is zero.
I think impossible fantasies are valuable, partially just because they are fun and I value fun, but partially also because I think they can still inspire us even when the correlation to reality is not direct. I think my superhero fantasies have inspired me to think more deeply about morality and about my place in the world. I buy lotto tickets every so often, and I have also read about investment strategies and I make sure my 401k is fully funded. I put MUCH, MUCH more money into index funds than I spend on the lottery, but buying the lottery ticket every so often helps tickle that "wouldn't it be nice to be rich" reward center in my brain, and THAT helps to keep me on track in my savings and investments. These things can be indirect.
The classic criticism of the lottery is that the people who play are the ones who can least afford to lose; that the lottery is a sink of money, draining wealth from those who most need it. Some lottery advocates, and even some commentors on Overcoming Bias, have tried to defend lottery-ticket buying as a rational purchase of fantasy—paying a dollar for a day’s worth of pleasant anticipation, imagining yourself as a millionaire.
But consider exactly what this implies. It would mean that you’re occupying your valuable brain with a fantasy whose real probability is nearly zero—a tiny line of likelihood which you, yourself, can do nothing to realize. The lottery balls will decide your future. The fantasy is of wealth that arrives without effort—without conscientiousness, learning, charisma, or even patience.1
Which makes the lottery another kind of sink: a sink of emotional energy. It encourages people to invest their dreams, their hopes for a better future, into an infinitesimal probability. If not for the lottery, maybe they would fantasize about going to technical school, or opening their own business, or getting a promotion at work—things they might be able to actually do, hopes that would make them want to become stronger. Their dreaming brains might, in the 20th visualization of the pleasant fantasy, notice a way to really do it. Isn’t that what dreams and brains are for? But how can such reality-limited fare compete with the artificially sweetened prospect of instant wealth—not after herding a dot-com startup through to IPO, but on Tuesday?
Seriously, why can’t we just say that buying lottery tickets is stupid? Human beings are stupid, from time to time—it shouldn’t be so surprising a hypothesis.
Unsurprisingly, the human brain doesn’t do 64-bit floating-point arithmetic, and it can’t devalue the emotional force of a pleasant anticipation by a factor of 0.00000001 without dropping the line of reasoning entirely. Unsurprisingly, many people don’t realize that a numerical calculation of expected utility ought to override or replace their imprecise financial instincts, and instead treat the calculation as merely one argument to be balanced against their pleasant anticipations—an emotionally weak argument, since it’s made up of mere squiggles on paper, instead of visions of fabulous wealth.
This seems sufficient to explain the popularity of lotteries. Why do so many arguers feel impelled to defend this classic form of self-destruction?2
The process of overcoming bias requires (1) first noticing the bias, (2) analyzing the bias in detail, (3) deciding that the bias is bad, (4) figuring out a workaround, and then (5) implementing it. It’s unfortunate how many people get through steps 1 and 2 and then bog down in step 3, which by rights should be the easiest of the five. Biases are lemons, not lemonade, and we shouldn’t try to make lemonade out of them—just burn those lemons down.
1See Po Bronson, “How Not to Talk to Your Kids,” New York, 2007, http://nymag.com/news/features/27840.
2See “Debiasing as Non-Self-Destruction.” http://lesswrong.com/lw/hf/debiasing_as_nonselfdestruction.