"Now suppose we discover that a Ph.D. economist buys a lottery ticket every week. We have to ask ourselves: Does this person really understand expected utility, on a gut level?"
Tricky question. It we look purely at the financial return, the odds, then no. If we look at the return in utility, possibly yes.
Is $1 too much to pay for a couple of days of pleasurable dreams about what one would do if one won? Don't we think that such fleeing from reality has some value to the one entering such a fantasy, a suspension of the rules of the real world?
If we don't agree that that has some value then it's going to be terribly difficult to explain why people spend $8 to do to the movies for 90 minutes.
Comment author:theAkash
15 December 2013 11:54:06PM
*
1 point
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I partially AWYC, but unless there's some aspect to the experience that I don't get, I don't see why actually buying the lottery ticket is necessary.
Going to a movie helps one escape into fantasy. A lottery ticket seems like a much less helpful prop for this. I can - and have, particularly as a child - fantasize about what I would do with wealth and status (although the means of achieving such, in my fantasies, has generally been the slightly lesser improbability of becoming a famous author or something similar) completely unaided.
In fact, it might be better to do as I did and imagine achieving your incredible wealth by some means other than lottery winnings, precisely because winning the lottery is so improbable. Thanks to a horrifying history of akrasia on that front and some amount of realization that I really want to do science instead, I haven't actually made any effective moves towards becoming an author, but nevertheless it is, I think, an accepted fact that people will be more motivated to do what they fantasize about.
Why not let them be motivated to do something actually useful?
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"Now suppose we discover that a Ph.D. economist buys a lottery ticket every week. We have to ask ourselves: Does this person really understand expected utility, on a gut level?"
Tricky question. It we look purely at the financial return, the odds, then no. If we look at the return in utility, possibly yes.
Is $1 too much to pay for a couple of days of pleasurable dreams about what one would do if one won? Don't we think that such fleeing from reality has some value to the one entering such a fantasy, a suspension of the rules of the real world?
If we don't agree that that has some value then it's going to be terribly difficult to explain why people spend $8 to do to the movies for 90 minutes.
I partially AWYC, but unless there's some aspect to the experience that I don't get, I don't see why actually buying the lottery ticket is necessary.
Going to a movie helps one escape into fantasy. A lottery ticket seems like a much less helpful prop for this. I can - and have, particularly as a child - fantasize about what I would do with wealth and status (although the means of achieving such, in my fantasies, has generally been the slightly lesser improbability of becoming a famous author or something similar) completely unaided.
In fact, it might be better to do as I did and imagine achieving your incredible wealth by some means other than lottery winnings, precisely because winning the lottery is so improbable. Thanks to a horrifying history of akrasia on that front and some amount of realization that I really want to do science instead, I haven't actually made any effective moves towards becoming an author, but nevertheless it is, I think, an accepted fact that people will be more motivated to do what they fantasize about.
Why not let them be motivated to do something actually useful?