If the lottery can accurately be called a “tax on the stupid”, does my playing it make me stupid? To understand (or perhaps rationalize) the answer, you need to understand the principles of Asymmetry.
As usually happens when the jackpot on PowerBall goes into the stratosphere (in this case it reached nearly $600 Million), someone here at TRC started a collection to play as a group. A pretty high percentage of our staff decided to play, even those with the most advanced degrees in statistics. So given the chances of winning are something like 1:175 million per ticket, why did we do it?
It certainly wasn’t that by buying so many tickets (nearly 50), the odds became anything near a slam dunk. In fact, they were easy enough to calculate (1:3,650,489.79) so there was no doubt in my mind that I wouldn’t win when I played and yet I still did.
The reason was simple. I had to choose to play or not to play and consider the likely outcome if we won or didn’t win:
In other words, playing offered only upside and not playing only downside. That is exactly why we consider Asymmetric effects whenever we do analysis. Otherwise we may miss what really drives consumer decision making.
Rich brings a passion for quantitative data and the use of choice to understand consumer behavior to his blog entries. His unique perspective has allowed him to muse on subjects as far afield as Dinosaurs and advanced technology with insight into what each can teach us about doing better research.