Despite odds of only 1 in nearly 300 million for a win, Americans are lining up to buy tickets for a chance at the ninth largest jackpot in U.S. history. Why bother? Evidently most of us, e.g., my wife,* suffer from “availability bias”. This occurs due to the diabolical way that lottery officials publicize winners, which when magnified by the media, makes is seem that these windfalls are commonplace.
Another fallacy, which tricks analytical types like me, is assuming that expected value becomes positive when the jackpot builds. That is, for every $1 invested, more than that is likely to be returned, at least on average. The flaw in this calculation is that lottomaniacs swarm on the big pots, thus making it very likely that the payoff must then be shared among multiple winners. For details, follow this thread on XKCD’s forum.
*I asked her “If you won the lottery, would you still love me?’” and she said: “Of course I would. I’d miss you, but I’d still love you.” (Credit goes Irish comedian Frank Carson for this witty comeback.)