Re: lotteries and elections

2004-09-08 Thread Fred Foldvary
> On Tue, 7 Sep 2004, Fred Foldvary wrote:
> > Of course one has a right to complain, but what is meant is that by not
> > casting a ballot, one has voted to let the others decide, so if you
> > later complain, you contradict yourself.
>
> ... You're offering a fixed coin here.  Heads I don't vote and I
> can't complain because I wasn't part of the process; tails I vote and I
> can't complain because I accepted the democrated process.
> Eric Crampton

No. The system forces us to vote; not casting a ballot is voting to let the
others decide.  Casting a ballot not in favor of the establishment parties
implies one does not approve of the established process and parties.

> others decide regardless of
> whether/how you vote.

The issue is your decision, not what others do.

> By refusing to vote, you deny them that legitimacy.

Refusing to vote puts one in the same set as those who are apathetic, and
the latter are the majority of non-voters.  The clear signal of disapproval
is to cast a ballot in opposition to the establishment.

Fred Foldvary


Re: lotteries and elections

2004-09-07 Thread Eric Crampton
On Tue, 7 Sep 2004, Fred Foldvary wrote:

> Of course one has a right to complain, but what is meant is that by not
> casting a ballot, one has voted to let the others decide, so if you later
> complain, you contradict yourself.

Oh come on.  You're offering a fixed coin here.  Heads I don't vote and I
can't complain because I wasn't part of the process; tails I vote and I
can't complain because I accepted the democrated process.  Either way, I
lose and the government wins.

Odds of decisiveness are nil; consequently, others decide regardless of
whether/how you vote.  By voting you are legitimating the decision made by
others.  By refusing to vote, you deny them that legitimacy.  Only in
voting and complaining does one contradict oneself.


Eric Crampton


Re: lotteries and elections

2004-09-07 Thread Fred Foldvary
--- Aschwin de Wolf <[EMAIL PROTECTED]> wrote:
> It may be more accurate to say that at the moment of casting a ballot the
> rest of the country has sovereignty over me...

No, because at that moment, I express my will as to who shall govern.
Nobody is forcing me to choose whom to vote for.
Every other voter is sovereign also.
It is only after casting the ballots that I find that the majority have
voted to deny my sovereignty until the next election.

> "if a
> citizen doesn't vote he has no right to bitch about illegal wars or tax
> n'spend."

Of course one has a right to complain, but what is meant is that by not
casting a ballot, one has voted to let the others decide, so if you later
complain, you contradict yourself.

Fred Foldvary


Re: lotteries and elections

2004-09-02 Thread Wei Dai
In other words, what you're suggesting is that for some, lotteries and
voting are like candy, pornography, birth control, or narcotics, i.e., a
legitimate way (in some cultures) for a person to deliberately subvert his
own genetic programming and obtain pleasure that he doesn't "deserve".

Ok, I can buy that, but I still think there must be a large fraction
of lottery players and voters who don't know, even intellectually, that
their chances of winning or changing the election outcome are tiny. But it
doesn't look like enough data exist to settle the matter either way.

On Wed, Sep 01, 2004 at 10:07:00PM -0400, Robert A. Book wrote:
> Whenever I ask seemingly intelligent lottery players why they play,
> the answer is usually something along the lines of "I know they
> chances of winning are tiny, but for a dollar I get to dream of
> winning for a whole week."  In other words, they (may) know the
> probability is extremely small, but that extremely small probability
> has a utility value beyond value the chance of dollars that goes with
> it.  This is analogous to the entertainment value of playing Las Vegas
> style gambling games like cards, roulette, and slot machines.
>
> Something similar may apply to voting -- everyone knows the chances of
> an election being decided by a single vote are miniscule, but they get
> some satisfaction from participating in the process, and maybe even
> from knowing that they made the total for their candidate in their
> county printed in the newspaper the next day from "138,298" to
> "138,299."
>
> --Robert Book


Re: lotteries and elections

2004-09-02 Thread Aschwin de Wolf
> At the moment of casting a ballot, I feel like a sovereign human being.
> That is my only opportunity to be a sovereign rather than a subject of the
> state.  That's worth the small time cost of casting the ballot.

It may be more accurate to say that at the moment of casting a ballot the
rest of the country has sovereignty over me...

One economist today on what *non*-voting doesn't express:

"I will begin by tackling what I think is the weakest objection to not
voting that I received. (...)While it was advanced by several of my
correspondents, one in particular phrased it quite succinctly, saying, "if a
citizen doesn't vote he has no right to bitch about illegal wars or tax n'
spend."
However, I think that contention is precisely backwards. To see why, imagine
a stranger approaching you, a gun in his hand, and declaring that you have
the "right" to play Russian roulette with him. If you don't exercise your
right, he says, he still plans to aim his gun at you, spin the cylinder, and
then pull the trigger. If you agree to take part in his proposed game, it
seems to me, then you have weakened the force of any protest you might lodge
about the outcome. On the other hand, if you tell him you want no part of
such foolishness, and that he should leave you alone, then how in the world
would that negate your right to object to his plan?

Isn't our "right" to vote closely analogous to that situation? Although I'm
offered the chance to take my own turn spinning the cylinder and pulling the
trigger of the gun, I'm not permitted to opt out of my role as a potential
target. If I attempt to ignore the outcome of an election, based on the
simple fact that I never agreed to abide by it in the first place, the State
is prepared to use deadly force against me, in order to compel me to pay
attention. Why should my refusal to participate in the State's aggressive
schemes mean that I could no longer criticize them?"

http://www.lewrockwell.com/callahan/callahan136.html


Re: lotteries and elections

2004-09-02 Thread Fred Foldvary
--- [EMAIL PROTECTED] wrote:
>  What other
> reasons might people vote besides believing they can influence the
> outcome?

At the moment of casting a ballot, I feel like a sovereign human being.
That is my only opportunity to be a sovereign rather than a subject of the
state.  That's worth the small time cost of casting the ballot.

Fred Foldvary


Re: lotteries and elections

2004-09-01 Thread Robert A. Book
> Quoth Weidai:
>
> > "Why have economists latched onto the idea of "expressive voting", when a
> > much simpler explanation is that most apparently irrational voting really is
> > irrational? Of course "expressive voting" preserves the assumption of rationality,
> > but there is still the problem of participation in lotteries with negative
> > expected payoffs."
>
> Participation in lotteries with negative expected payoffs is not a "problem"
> if participants are risk-seeking.  If I get 0 utils from having $0, 5 utils
> from having $5, and 15 utils from having $10, I'll be eager to wager my $5 on
> the toss of a coin even though the expected dollar payoff is zero.  This is
> simply because the expected util payoff is positive.  Similarly, although in most
> lotteries the expected dollar payoff is negative, the expected util payoff to
> participants may be positive.  I expect some variant of the above could
> explain "apparently irrational voting."


Whenever I ask seemingly intelligent lottery players why they play,
the answer is usually something along the lines of "I know they
chances of winning are tiny, but for a dollar I get to dream of
winning for a whole week."  In other words, they (may) know the
probability is extremely small, but that extremely small probability
has a utility value beyond value the chance of dollars that goes with
it.  This is analogous to the entertainment value of playing Las Vegas
style gambling games like cards, roulette, and slot machines.

Something similar may apply to voting -- everyone knows the chances of
an election being decided by a single vote are miniscule, but they get
some satisfaction from participating in the process, and maybe even
from knowing that they made the total for their candidate in their
county printed in the newspaper the next day from "138,298" to
"138,299."

--Robert Book


Re: lotteries and elections

2004-09-01 Thread Gil Guillory
Ugh. "Utils" and now "problem of voter apathy"? I don't like the way
this thread is heading...

Gil Guillory, P.E.
Principal Engineer
KBR Tower, KT-3131B
email [EMAIL PROTECTED]
ph. 713-753-8797
fax 713-753-6266

> -Original Message-
> From: ArmChair List [mailto:[EMAIL PROTECTED] On Behalf Of
Hamish
> Barney
> Sent: Wednesday, September 01, 2004 11:56 AM
> To: [EMAIL PROTECTED]
> Subject: Re: lotteries and elections
>
> In Australia voting is actually compulsory. Failure to vote in an
> election can result in a fine. Voting then becomes very rational. I
> think in many ways this is a good way of getting around the problem of
> voter apathy and the otherwise apparent irrationality of voting.
>
> Hamish
>
> Michael Giesbrecht wrote:
>
> >>From: ArmChair List [mailto:[EMAIL PROTECTED] On Behalf Of
> >
> > Wei
> >
> >>Dai
> >
> > [snip]
> >
> >>Why have economists latched onto the idea of "expressive voting",
when
> >
> > a
> >
> >>much simpler explanation is that most apparently irrational voting
> >
> > really
> >
> >>is irrational? Of course "expressive voting" preserves the
assumption
> >
> > of
> >
> >>rationality, but there is still the problem of participation in
> >
> > lotteries
> >
> >>with negative expected payoffs. Is that just to be ignored, or will
> >>someone come up with a theory of "expressive lottery ticket
purchase"?
> >
> >
> > By far, the most common response I get when I mention that one's
> > individual vote does not effect the outcome of an election, is
> > astonished indignation. I am assured that regardless of the (lack
of)
> > effect of my individual vote, voting is an obligation born out of
the
> > principle of reciprocity. We, as individuals, should vote, because
if
> > everybody didn't vote there would be no electoral process. Voting is
> > thus one of many necessary things we should do in order to be a
> > respectable member of the community.
> >
> > By the way, do not attempt to discuss this subject at a cocktail
party
> > with drunken public elementary school teachers. Before you know it,
> > you'll be personally responsible for, not only decline of western
> > civilization, but all various and sundry despotic regimes throughout
the
> > world. It will end with you promising to vote Green in the next, and
all
> > future elections, just to stop the crying.
> >
> > Cheers,
> > Michael Giesbrecht


Re: lotteries and elections

2004-09-01 Thread Hamish Barney
In Australia voting is actually compulsory. Failure to vote in an
election can result in a fine. Voting then becomes very rational. I
think in many ways this is a good way of getting around the problem of
voter apathy and the otherwise apparent irrationality of voting.
Hamish
Michael Giesbrecht wrote:
From: ArmChair List [mailto:[EMAIL PROTECTED] On Behalf Of
Wei
Dai
[snip]
Why have economists latched onto the idea of "expressive voting", when
a
much simpler explanation is that most apparently irrational voting
really
is irrational? Of course "expressive voting" preserves the assumption
of
rationality, but there is still the problem of participation in
lotteries
with negative expected payoffs. Is that just to be ignored, or will
someone come up with a theory of "expressive lottery ticket purchase"?

By far, the most common response I get when I mention that one's
individual vote does not effect the outcome of an election, is
astonished indignation. I am assured that regardless of the (lack of)
effect of my individual vote, voting is an obligation born out of the
principle of reciprocity. We, as individuals, should vote, because if
everybody didn't vote there would be no electoral process. Voting is
thus one of many necessary things we should do in order to be a
respectable member of the community.
By the way, do not attempt to discuss this subject at a cocktail party
with drunken public elementary school teachers. Before you know it,
you'll be personally responsible for, not only decline of western
civilization, but all various and sundry despotic regimes throughout the
world. It will end with you promising to vote Green in the next, and all
future elections, just to stop the crying.
Cheers,
Michael Giesbrecht


Re: lotteries and elections

2004-09-01 Thread Shadowgold



Quoth Weidai:
 
"Why have economists latched onto the idea of "expressive voting", when a much simpler explanation is that most apparently irrational voting really is irrational? Of course "expressive voting" preserves the assumption of rationality, but there is still the problem of participation in lotteries with negative expected payoffs."
 
Participation in lotteries with negative expected payoffs is not a "problem" if participants are risk-seeking.  If I get 0 utils from having $0, 5 utils from having $5, and 15 utils from having $10, I'll be eager to wager my $5 on the toss of a coin even though the expected dollar payoff is zero.  This is simply because the expected util payoff is positive.  Similarly, although in most lotteries the expected dollar payoff is negative, the expected util payoff to participants may be positive.  I expect some variant of the above could explain "apparently irrational voting."
 
--Brian


Re: lotteries and elections

2004-09-01 Thread Dimitriy V. Masterov
I don't really see how coercing people to vote will render voting any more
rational. More importantly, do we really want people who don't care enough
about politics to cast their votes? How will this improve anything? They
will just show up and vote for the fellow with the glitziest
advertisement, or the fellow who gives away the longest foot-long hot
dogs, and there is nothing necessarily good or optimal about that. The
fine is a blunt instrument which alters only their voting behavior, and
does nothing to get them to ponder the issues. Any political participation
gains are superficial. It leaves the marginal voter worse off by imposing
a cost, and it probably makes us worse off to boot. This kind of policy is
like killing flies with a sledge hammer. You can do it, but why on earth
would you do it? Democracy's best safeguard is voter apathy, not
enlightened paternalism. This is why Rock The Vote is a horrible campaign,
unless of course the sort of voter that it drags in is likely to vote for
your candidate.

DVM


Re: lotteries and elections

2004-09-01 Thread Michael Giesbrecht
> From: ArmChair List [mailto:[EMAIL PROTECTED] On Behalf Of
Wei
> Dai
[snip]
>
> Why have economists latched onto the idea of "expressive voting", when
a
> much simpler explanation is that most apparently irrational voting
really
> is irrational? Of course "expressive voting" preserves the assumption
of
> rationality, but there is still the problem of participation in
lotteries
> with negative expected payoffs. Is that just to be ignored, or will
> someone come up with a theory of "expressive lottery ticket purchase"?

By far, the most common response I get when I mention that one's
individual vote does not effect the outcome of an election, is
astonished indignation. I am assured that regardless of the (lack of)
effect of my individual vote, voting is an obligation born out of the
principle of reciprocity. We, as individuals, should vote, because if
everybody didn't vote there would be no electoral process. Voting is
thus one of many necessary things we should do in order to be a
respectable member of the community.

By the way, do not attempt to discuss this subject at a cocktail party
with drunken public elementary school teachers. Before you know it,
you'll be personally responsible for, not only decline of western
civilization, but all various and sundry despotic regimes throughout the
world. It will end with you promising to vote Green in the next, and all
future elections, just to stop the crying.

Cheers,
Michael Giesbrecht


Re: lotteries and elections

2004-09-01 Thread AdmrlLocke
Dear Michael,

I laughed out loud at your concluding sentence.  Well said!  I've had almost
the identical response from one of my undergraduate students, except, being
only 18 or thereabout, she exercised the adolescent eye-roll instead.

David
In a message dated 9/1/04 12:30:02 PM, [EMAIL PROTECTED]
writes:

>
>By far, the most common response I get when I mention that one's
>individual vote does not effect the outcome of an election, is
>astonished indignation. I am assured that regardless of the (lack of)
>effect of my individual vote, voting is an obligation born out of the
>principle of reciprocity. We, as individuals, should vote, because if
>everybody didn't vote there would be no electoral process. Voting is
>thus one of many necessary things we should do in order to be a
>respectable member of the community.
>
>By the way, do not attempt to discuss this subject at a cocktail party
>with drunken public elementary school teachers. Before you know it,
>you'll be personally responsible for, not only decline of western
>civilization, but all various and sundry despotic regimes throughout the
>world. It will end with you promising to vote Green in the next, and all
>future elections, just to stop the crying.
>
>Cheers,
>Michael Giesbrecht


Re: lotteries and elections

2004-09-01 Thread AdmrlLocke
Well I can't speak for anyone else, but I'd never ever heard the term
"expressive voting" before yesterday when someone used it on the list, and I'm not
exactly sure how people define it.

I do know that when I lived in Iowa I encountered a great many voters who
supported candidates like Alan Keyes in the Republican primaries, knowing full
well that he couldn't win, and yet expressing the desire to "send a message" by
voting for him.  Would that be an example of expressive voting?

David

In a message dated 9/1/04 10:00:45 AM, [EMAIL PROTECTED] writes:

>On Tue, Aug 31, 2004 at 07:50:08PM -0400, [EMAIL PROTECTED] wrote:
>> I've been discussing with my undergradute students the rationality of
>voting.
>
>What about the possibility that many people do not deal well with with
>small probabilities, and mistakenly think that their votes matter?
>
>Why have economists latched onto the idea of "expressive voting", when
>a
>much simpler explanation is that most apparently irrational voting really
>is irrational? Of course "expressive voting" preserves the assumption of
>rationality, but there is still the problem of participation in lotteries
>with negative expected payoffs. Is that just to be ignored, or will
>someone come up with a theory of "expressive lottery ticket purchase"?


Re: lotteries and elections

2004-09-01 Thread Xianhang Zhang
Wei Dai wrote:
On Tue, Aug 31, 2004 at 08:25:16PM -0500, Jeffrey Rous wrote:

When people ask me why I vote, my standard answer is "because I can." Voting simply 
reminds me that we have something special going here in the free world. I do a decent job of 
learning about the candidates and issues not because I think my single vote matters, but 
because, overall, voting does matter and I get a kick out of being part of the process.

Maybe you know that your vote doesn't matter and still vote anyway, but I
bet there is a high positive correlation among the general population
between the belief that one's vote matters, and willingness to vote.
Using ourselves for anecdotes in this case is a bad idea. We as a
self-selected group of armchair economists already know that the
probability that one's vote will make a difference in the outcome is tiny,
so of course anybody who still votes will be voting for other reasons.

It seems to be taken as a given that the cost/benifit analysis of voting
seems to be placed firmly on the side of not-voting. Does anybody have
any data to back that up? It seems to me that even though the chance
that your vote would matter is rather small, the effect it can have if
it does matter is very, very large. An interesting thing I've heard
about from the Australian elections is that the entire fate of the
country depends on as little as 20,000 people. Most electorates are
"safe" and your vote doesn't matter either way, in swing states, most
voters are already decided so those 20,000 people have a huge effect on
the election outcomes.
Xianhang Zhang


Re: lotteries and elections

2004-09-01 Thread Wei Dai
On Tue, Aug 31, 2004 at 07:50:08PM -0400, [EMAIL PROTECTED] wrote:
> I've been discussing with my undergradute students the rationality of voting.

What about the possibility that many people do not deal well with with
small probabilities, and mistakenly think that their votes matter?

Why have economists latched onto the idea of "expressive voting", when a
much simpler explanation is that most apparently irrational voting really
is irrational? Of course "expressive voting" preserves the assumption of
rationality, but there is still the problem of participation in lotteries
with negative expected payoffs. Is that just to be ignored, or will
someone come up with a theory of "expressive lottery ticket purchase"?


Re: lotteries and elections

2004-09-01 Thread Wei Dai
On Tue, Aug 31, 2004 at 08:25:16PM -0500, Jeffrey Rous wrote:
> When people ask me why I vote, my standard answer is "because I can." Voting simply 
> reminds me that we have something special going here in the free world. I do a 
> decent job of learning about the candidates and issues not because I think my single 
> vote matters, but because, overall, voting does matter and I get a kick out of being 
> part of the process.

Maybe you know that your vote doesn't matter and still vote anyway, but I
bet there is a high positive correlation among the general population
between the belief that one's vote matters, and willingness to vote.

Using ourselves for anecdotes in this case is a bad idea. We as a
self-selected group of armchair economists already know that the
probability that one's vote will make a difference in the outcome is tiny,
so of course anybody who still votes will be voting for other reasons.


Re: lotteries and elections

2004-08-31 Thread Jeffrey Rous
When people ask me why I vote, my standard answer is "because I can." Voting simply 
reminds me that we have something special going here in the free world. I do a decent 
job of learning about the candidates and issues not because I think my single vote 
matters, but because, overall, voting does matter and I get a kick out of being part 
of the process.

But, I wonder, how many people go to vote on a Tuesday because they find it more 
pleasurable than work? Would there be a higher or lower turnout on a Saturday when 
folks have to give up something more pleasurable?

-Jeff

>>> Aschwin de Wolf <[EMAIL PROTECTED]> 08/31/04 07:36PM >>>
> I've been discussing with my undergradute students the rationality of
voting.
> People might get other benefits from voting besides thinking that their
one
> vote can influence the outcome.  Some people feel a civic pride in voting.
> Others vote to prevent others from telling them they don't have a "right
to
> complain," a comment complaint lobbed at people who don't vote.

A problem with many of these reasons is that they do partly rely on the
illusion that their vote does matter! "Expressive voting" is not a
completely separate issue. Why feel pride in participating in an irrational
system? Why not express your political views in a more efficient way than
voting? etc.

-aschwin


Re: lotteries and elections

2004-08-31 Thread AdmrlLocke
In a message dated 8/31/04 8:36:29 PM, [EMAIL PROTECTED] writes:

>A problem with many of these reasons is that they do partly rely on the
>
>illusion that their vote does matter! "Expressive voting" is not a
>
>completely separate issue. Why feel pride in participating in an irrational
>
>system? Why not express your political views in a more efficient way than
>
>voting? etc.

It's irrational only if the cost exceeds the benefit.  If someone gains a
benefit from voting that exceeds their opportunity cost, then it's not irrational
for them to vote.  As far as other means, they mostly have  much higher
opportunity costs and might not actually have much more likelihood of affecting the
outcome.


Re: lotteries and elections

2004-08-31 Thread Aschwin de Wolf
> I've been discussing with my undergradute students the rationality of
voting.
> People might get other benefits from voting besides thinking that their
one
> vote can influence the outcome.  Some people feel a civic pride in voting.
> Others vote to prevent others from telling them they don't have a "right
to
> complain," a comment complaint lobbed at people who don't vote.

A problem with many of these reasons is that they do partly rely on the
illusion that their vote does matter! "Expressive voting" is not a
completely separate issue. Why feel pride in participating in an irrational
system? Why not express your political views in a more efficient way than
voting? etc.

-aschwin


Re: lotteries and elections

2004-08-31 Thread AdmrlLocke
I've been discussing with my undergradute students the rationality of voting.
People might get other benefits from voting besides thinking that their one
vote can influence the outcome.  Some people feel a civic pride in voting.
Others vote to prevent others from telling them they don't have a "right to
complain," a comment complaint lobbed at people who don't vote.  I like the
excitement of going to the polls and seeing everyone else all keyed up about the
election.  Some people pick a candidate and then cheer for him or her, and then
feel good about that candidate winning the election the way they would a race
horse or a sports team.  For some people voting might serve as a social
outlet--something to do around other people instead of just staying home.  What other
reasons might people vote besides believing they can influence the outcome?

David Levenstam


In a message dated 8/31/04 12:31:37 PM, [EMAIL PROTECTED] writes:

>Does anyone know if there is a correlation between a person's
>willingness to buy lottery tickets, and his willingness to vote in large
>elections (where the chances of any vote being pivotal is tiny)?
>
>A simple explanation for both of these phenomena, where people choose
>to do things with apparently negative expected payoff, is misunderstanding
>or miscalculation of probabilities. This theory would predict a positive
>correlation. I'm curious if anyone has done a survey or experiment to test
>this.


Re: lotteries and elections

2004-08-31 Thread Robert A. Book
Dimitriy V. Masterov writes:
> If my memory serves me, when no one has a winning ticket, the pot gets
> rolled over to the next round. When you have several large states that run
> a joint lottery, the sum can get really enormous when this happens, so
> that the expected gain is positive even with a minuscule probability of
> winning.

Right.

> Economic intuition will predict that when this happens, lots of
> people will rush to buy tickets,

Right.

> so that the the probability of winning
> will fall, eliminating any gains. However, this does not always seem to be
> the case in real life.

Not quite right, but sort of.  With these games, the player picks
numbers, the lottery picks numbers, and the player wins if his/her
numbers match the lotteries.  The probability of a given ticket
winning does NOT depend on the number of tickets purchased -- after
all, how else could you have a round when "no one has a winning
ticket"?  The size of the pot in the NEXT round (if no one wins) might
depend on the number of tickets sold in this round, depending on the
lottery rules, but that doesn't affect the expected gain on THIS
round.

The only thing that does impact the expected gain on this round is the
fact that more people buying tickets means there's a greater chance
someone else picks the wining numbers also.  Since the pot is split
among all players who pick the winning numbers, this affects the
expected gain, but not the probability of a win.

--Robert


Re: lotteries and elections

2004-08-31 Thread Robert A. Book
> On Tue, 31 Aug 2004, Dimitriy V. Masterov wrote:
>
> > I don't have an answer for you, but it seems important to point out that
> > not all lotteries have a negative expected payoff. Large, multi-state
> > jackpots are often a "fair" bet, even after taxes.

M. Christopher Auld:
> How does that come about?


In some lotteries, you pick numbers (say five or six numbers between 1
and 43), they draw "winning" numbers, and if your all numbers match
all their numbers, you win some huge "jackpot."  (Some lotteries have
smaller prized for partial matches, I think some require numbers to be
picked in order and some don't, but you get the idea.)  They draw
numbers on a schedule -- say, once or twice a week -- and only tickets
bought since the last drawing can match the current drawing.  Sometimes, no
one picked the "winning" numbers, so (a portion of) the jackpot "rolls
over," increasing the prize money for the next drawing.

The thing is, you get to observe the jackpot amount before buying a
ticket.  So it is possible for a ticket to have a positive expected
value on occasion, even if as a whole the lottery has a guaranteed
profit.


--Robert Book
  [EMAIL PROTECTED]


Re: lotteries and elections

2004-08-31 Thread Dimitriy V. Masterov
If my memory serves me, when no one has a winning ticket, the pot gets
rolled over to the next round. When you have several large states that run
a joint lottery, the sum can get really enormous when this happens, so
that the expected gain is positive even with a minuscule probability of
winning. Economic intuition will predict that when this happens, lots of
people will rush to buy tickets, so that the the probability of winning
will fall, eliminating any gains. However, this does not always seem to be
the case in real life.

DVM


On Tue, 31 Aug 2004, Christopher Auld wrote:

> On Tue, 31 Aug 2004, Dimitriy V. Masterov wrote:
>
> > I don't have an answer for you, but it seems important to point out that
> > not all lotteries have a negative expected payoff. Large, multi-state
> > jackpots are often a "fair" bet, even after taxes.
>
> How does that come about?
>
>
> Cheers,
>
> M. Christopher Auld[EMAIL PROTECTED]
> Assistant Professorhttp://jerry.ss.ucalgary.ca
> Department of Economicsvoice: 1.403.220.4098
> University of Calgary  FAX:   1.403.282.5262
>

___
Dimitriy V. Masterov

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Re: lotteries and elections

2004-08-31 Thread Christopher Auld
On Tue, 31 Aug 2004, Dimitriy V. Masterov wrote:

> I don't have an answer for you, but it seems important to point out that
> not all lotteries have a negative expected payoff. Large, multi-state
> jackpots are often a "fair" bet, even after taxes.

How does that come about?


Cheers,

M. Christopher Auld[EMAIL PROTECTED]
Assistant Professorhttp://jerry.ss.ucalgary.ca
Department of Economicsvoice: 1.403.220.4098
University of Calgary  FAX:   1.403.282.5262


Re: lotteries and elections

2004-08-31 Thread Dimitriy V. Masterov
I don't have an answer for you, but it seems important to point out that
not all lotteries have a negative expected payoff. Large, multi-state
jackpots are often a "fair" bet, even after taxes.

The best economic analyses I've seen are Charles T. Clotfelter and Philip
J. Cook, Selling Hope: State Lotteries In America (Cambridge, MA: Harvard
University Press, 1989), and Clotfelter, Charles T., and Philip J. Cook.
1990. "On the Economics of State Lotteries." The Journal of Economic
Perspectives, 4(4): 105-119. These are mostly concerned with the taxation
aspect, but you might find something useful there.

Dimitriy V. Masterov


lotteries and elections

2004-08-31 Thread Wei Dai
Does anyone know if there is a correlation between a person's
willingness to buy lottery tickets, and his willingness to vote in large
elections (where the chances of any vote being pivotal is tiny)?

A simple explanation for both of these phenomena, where people choose
to do things with apparently negative expected payoff, is misunderstanding
or miscalculation of probabilities. This theory would predict a positive
correlation. I'm curious if anyone has done a survey or experiment to test
this.