Quote:
Originally Posted by browni3141
N is an arbitrary choice without mathematical support as far as I can tell, and I don't think this is true regardless of the number of times you expect to be able to repeat the wager. If someone offered me $1000 to my $100 to try to roll a 6 on a 6-sided die, but I could try only once, you're saying I should not accept, but if I could make 10 bets I should accept? This makes little sense.
N is defined by the probability of success.
I didn't exactly say you should accept/reject based on whether it was a repeatable wager, but was trying to say that for a one-time wager on a very long shot, basing the decision solely on a slightly positive EV is irrational. Basing it on utility as you mentioned, is more valid, but that is true for the lottery every week, not just when it becomes slightly +EV. Everyone can afford a dollar (zilch utility) and everyone would change their life with the win (enormous utility) in any week. This isn't an argument to play the lottery either, but it's a much better and more rational reason than the slightly positive EV.
Bottom line is that for all practical purposes, betting on last week's power ball was not a better or worse wager than any other week. The slight change in EV is so insignificant for making a small number of wagers that it should not be a rational decision factor. Almost everyone will still lose that bet playing it every day for the rest of their life.
Last edited by NewOldGuy; 08-25-2017 at 01:36 PM.