A good reason for not playing the lottery is that you can get better odds by playing roulette, or using other forms of gambling.
Roulette doesn’t give a big enough payoff to move you up into the steep area of your utility function, so it doesn’t get the “a dollar won is worth more than a dollar spent” effect.
It would also be a plausible conjecture that, if someone’s utility function is sigmoid, and they’re on the low end of it, their model of their utility function is an exponential. That would enhance the effect.
One problem with that is that, if you’ve won at roulette a few times in a row, you’re now going to be risking quite a lot if you bet it all again. You’ll actually end up badly regretting your actions in a lot of cases.
Roulette doesn’t give a big enough payoff to move you up into the steep area of your utility function, so it doesn’t get the “a dollar won is worth more than a dollar spent” effect.
It would also be a plausible conjecture that, if someone’s utility function is sigmoid, and they’re on the low end of it, their model of their utility function is an exponential. That would enhance the effect.
Just bet 5 times in a row. Still better odds than the lottery.
True.
Actually, I don’t know if it’s true. But it sounds plausible.One problem with that is that, if you’ve won at roulette a few times in a row, you’re now going to be risking quite a lot if you bet it all again. You’ll actually end up badly regretting your actions in a lot of cases.
Re: Roulette doesn’t give a big enough payoff [...]
Bet twice consecutively, then. Roulette’s payoffs are flexible enough to give you practically any odds you desire.
...and what about the diminishing utility of money? Often you don’t want to trade odds for cash.