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ciphergoth comments on Call for Anonymous Narratives by LW Women and Question Proposals (AMA) - Less Wrong Discussion
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I would be curious to know how people answer given the opportunity to spend $500 on a $1M/15% lottery ticket.
That depends a lot on the nature of the lottery. If it was a typical lottery that for some reason had a 15% chance to win, a $500 ticket would not be worth it as all, since thousands of people would win and split the prize amongst themselves and the expected value would be much less than you would assume at first glance.
If it's just "spend $500 for a 15% chance of gaining a million," though, I'd take as many tickets as I could get!
Yes, that version seems much less problematic, and I think the average person might be in favor of buying infinity tickets.
I might actually not want to buy one. (When no loss is involved I take the chance at a million.) I might want to buy five, or go in together with several friends on one.
(instantaneous reflex activated)
What if I gave you $500, then asked you if you wanted to spend it on the ticket?
I'd also like to know whether some unexpected expense, like needing a $500 dental crown, would change your mind about accepting the free $500 instead of the free ticket.
If you gave me $500 and then immediately alerted me to the availability of a ticket you'd probably catch me before the $500 entered the "my money" mental bin, because I'd still be a little confused about why you randomly handed me $500 and expect to have to give it back.
Risks of medium-sized unexpected expenses like that are already factored into how conservative I am about handling money on this scale, so I don't think that would have an effect.