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Re: [Phys-L] lottery fundamentals

Here's a related question:

Suppose there were 10 player-slots available in a lottery game. Each of
those players gets to choose a single integer from 1 to 100. Then, they
draw the winning number from a hat. There is a $1,000,000 jackpot that will
be split among those of the 10 players who have chosen the winning number.

The slots are sold by auction on Ebay. How much would you bid? I have not
done the math yet, but I know I would not bid $10,000 even though (1/100) x
$1000000 = $10,000.


On Wed, Feb 26, 2014 at 10:19 PM, Anthony Lapinski <Anthony_Lapinski@pds.org
wrote:

But what if you buy all the numbers and everyone else buys a few numbers
each. So the jackpot is huge, but not every number combination was taken
by everyone else. And then you would be the only winner? No split with
anyone. Then you would win more than you put in, right?

Phys-L@Phys-L.org writes:
PowerBall and MegaMillions have (and will) reach the stage where the
'Jack Pot' is larger than the cost/ticket x odds of winning.
This is when the 'frenzy' sets in.
The last such situation with PowerBall (last week) did indeed have only
one winner.

HOWEVER - if you select the Immediate Cash payout it is but a fraction of
the advertised JackPot.
Approximately HALF the advertised JackPot.
To get the Advertised Amount you must accept the Annuity - paid out over
20 - 26 years (depending on the Game).

So, no, you can't buy every number and expect to Break Even.
Even if you are the only player to get the Winning Number.

On Feb 26, 2014, at 4:14 PM, John Denker <jsd@av8n.com> wrote:

On 02/26/2014 01:24 PM, Anthony Lapinski wrote:
In theory, could you ever pick all the combinations in a lottery, pay
for
the tickets, and win money?

No, for at least two reasons.

First of all, suppose you were the only player, or the only
really big player. If you did that the best you could hope
for is to win all the money in the pot, but that's less than
you paid, because the house takes its cut before the money
goes into the pot.

Secondly, suppose you weren't the only big player. Then
you would have to /share/ the prize.

Perhaps more importantly, use your physics intuition: Use
the /conservation/ idea. You're playing a less-than-zero-sum
game. Ticket-holders collectively cannot get out more than
they put in *and* your share of the pot is, on average,
proportional to the share of the tickets you bought.

This demonstrates an important idea: gambling is infamous
for being in a different category from ordinary commerce.
Ordinary commerce creates value. It is a positive-sum
game.

_______________________________________________
Forum for Physics Educators
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_______________________________________________
Forum for Physics Educators
Phys-l@phys-l.org
http://www.phys-l.org/mailman/listinfo/phys-l



_______________________________________________
Forum for Physics Educators
Phys-l@phys-l.org
http://www.phys-l.org/mailman/listinfo/phys-l