/sci/ - Science & Math » Thread #13392816

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Anonymous Wed 14 Jul 18:30:56 2021 No.13392816 View Reply Original Report

Quoted By: >>13392858

There is nothing wrong with buying a negative expected value lottery ticket for the same reason that there's nothing wrong with buying negative expected value insurance.

Anonymous

Anonymous Wed 14 Jul 2021 18:38:51 No.13392835 Report

Quoted By: >>13392864

For most people, utility decreases as you get wealthier.

Going from 900k to 1m is much less impactful than going from 0 to 100k

Going from 100k to 0 is much worse than going from 1m to 900k

Anonymous

Anonymous Wed 14 Jul 2021 18:45:47 No.13392858 Report

Quoted By:

>>13392816
right and wrong are arbitrary concepts

Anonymous

Anonymous Wed 14 Jul 2021 18:47:43 No.13392864 Report

Quoted By:

>>13392835
The downside risk for insurance is far lower than any other product with a similar potential payoff. The only comparable product is a call option, which is a positive EV product, but you're not going to find one that's leveraged as highly as the lottery.

Anonymous

Anonymous Wed 14 Jul 2021 18:47:49 No.13392865 Report

Quoted By: >>13392893

Wrong if you factor in risk.

For example, the risk of crashing your car is 10% a year and the costs would be $10000 unless you insure it for $1100, you are better off insuring it because the $10000 would throw your finances out of whack more than paying $1100 per year for 10 years. You pay $1000 for the luxury of stable finances.

Anonymous

Anonymous Wed 14 Jul 2021 18:53:30 No.13392893 Report

Quoted By: >>13392917

>>13392865
So apply that same thinking. $5 a month isn't going to "throw your finances out of whack", and the "risk" of gaining $100,000 could be worth it.

Anonymous

Anonymous Wed 14 Jul 2021 19:00:05 No.13392917 Report

Quoted By: >>13392957

>>13392893
>$5 a month
For most people I know that play it's $5 a week, some even $5 a day.

Anonymous

Anonymous Wed 14 Jul 2021 19:09:58 No.13392957 Report

Quoted By:

>>13392917
People investing stupidly doesn't make the products stupid. >>/biz/

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