Quote:
Originally Posted by browni3141
while $10 has fairly insignificant utility for most people, the opportunity to play a $10 lottery ticket is even more insignificant.
I mildly disagree.
While it varies from person to person, big prizes like the lottery hold disproportionate utility because it represents the only way people will break a certain threshold of wealth.
Imagine all the stuff you want to buy or do, and how much it would cost to do each one. Like let's say you want to start your own business and it would take $100,000. It's entirely reasonable that someone can make or save or borrow $100,000, so the idea of spending your life on 1 cent shots to try and win that seems silly compared to going out and earning it by conventional means. But if you want to do something that costs $10,000,000, it's something that's pretty out of reach for most people and entering a $1 lottery is worth more utility even though it carries thr same EV.
I agree with you that above a certain payout utility starts flattening out - that most people don't dream of doing something with $500,000,000 that they can't do with $100,000,000. To that end, I think we all agree that there isn't a significant difference between a big jackpot and a huge jackpot.
But I think there is a significant difference in utility between the baseline jackpot ($15 million?) and a medium one ($150ish million).