This is an awesome idea, and I intend to try it out.
I am a mathematician, and at the same time I can't resist the temptation to purchase the occasional lottery ticket. What most people miss about the lottery is that there can be utility to variance - the opposite of ennui.
As a mathetmatician how can you ever justify participating in a lottery where there is a possibility of no-winners or shared winners. It just destroys any hope of any positive EV.
Yes, I know the feeling from the times I bought a ticket myself, against rationality.
I'm not an expert, but seems to me this feeling is also the main driver leading to gambling addiction, which ultimately leads to addicts saying things like "It's not about the money, but the game itself", after having lost a ton of money.
Wonder if Yotta can lead to the same addiction, and if so if it is then solely applied for positive objectives (i.e. saving money), or lowers the barrier to entry for other gambling schemes that are less beneficial.
We definitely don't want people to start gambling. We hope that the riskless unlocking of upside that we provide shines through as a better option than risking money for upside, even if our overall upside is lower on an absolute basis.
Fair enough - I think it's a subjective thing and also depends on your current financial circumstances. I'm a starving startup founder, so the hope represents a real escape from my current financial circumstances.
If I were poorer, I suspect the happiness I gained from the lottery ticket purchases would be even greater.
If I already owned a home, on the other hand, I would value the lottery ticket hopes much lower.
I totally understand you! I'm a software engineer since 2006 and even though I followed a classical career (in Eastern Europe), we (me, my wife and our daughter) were struggling financially for the first approx 9 years.
Buying a lottery ticket from time to te, when the prize was big, made us live in a fantasy world between the time we bought it and when te results were announced. I think this thing - imagining a life without financial worries, lavish vacations and expensive toys, motivated me to learn more, try to launch a few startups and sacrifice my free time in order to try and achieve greatness.
Were those money well spent? Definitely yes (even though I haven't actually won the lottery)
The value is in the hope it creates. As a statistician, a lottery seem hopeless. To everyone else, it's about feeling that something impossible becomes possible.
Tbh lottery tickets can be a pretty cheap form of hope relative to other forms of gambling. Take a look at some of RobinHood's customers who are ”investing”. The odds seemed so favorable until they realized 95% of traders lose their money.
But people routinely buy insurance, and it's considered a right and moral thing to do. Though the math is exactly the same as with the lottery. Statistically, odds are unfavorable. But it buys peace of mind, so people pay.
The insurance is given a polarity and connection to the rest of your luck in such a way that it smooths out your risks. On the other hand, playing the lottery makes your good luck spikier. (Though there are more specific ways to say it, we could say that insurance is meant to make your life less impacted by chance -- more predictable -- while insurance is meant to make it more impacted by chance -- more unpredictable.)
Life is not all about EV. Especially not monetary EV.
I own my home. It's an objectively bad investment (my tech stocks sure appreciated more than a home I bought in 2008 before the crash :) But I like the feeling that comes with owning a home.
I go out for dinner. (Well, used to). It's objectively a waste of time and money, but I still like the feeling that comes with it.
I play guitar. There's no EV attached to it (in fact, people might pay me to stop ;) but there's still an emotional payoff.
The same goes for the lottery. For some people, there's entertainment value in it, despite understanding the mathematics of it. If you've ever played poker for money - unless you're exceptionally good, you paid money to sit around a table in a smoky room. EV is negative, emotional experience is a lot of fun. (Yeah, poker isn't entirely chance, but I promise that unless you're pretty good at it and spent a lot of time learning, it's pretty much equivalent)
We don't rigorously define a numeric EV on most things in life, but we do assign some notion of fairness. You go out for dinner, but going out for dinner comes with expectations, even if the monetary EV is < 1. Basically that the food won't kill you. Similarly there are certain expectations on the lottery on the practicality of winning - everyone knows the odds are against you, but there's still an expectation that a lucky enough someone can win.
A lottery that doesn't have a winner sounds rotten and I don't think you'd eat rotten food from a restaurant, no matter how much you accept that inherent EV of the transaction is negative. There are many, many more words that can and have been written about the psychology of lotteries, but suffice to say, for many lottery players, it's not as simple as "I know that the EV < 1, I'm just playing for the entertainment value".
For example, in some cases (I won't specify for the fear of being cancelled) your chance of becoming rich by your skills is exactly zero, and you know it. Chance of winning the lottery is small, but higher than zero.
I'm the same way, I know the lottery is a terrible bet but I still find myself buying a ticket every now and then. This was one of the main motivations for starting Yotta for me.
Got a potential bug report: Signed up for Yotta, and referred my wife. She added money to her account and bought tickets. I did not receive the 100 ticket referral bonus or, if I did, cannot figure out how to claim it.
The tickets get applied for the following week's contest. You should see "100 pending tickets" on the home screen of your app. If not, shoot me an email and I'll get it resolved asap!
Is it worth buying his "Ficciones" compilation ? I have heard about the Story "Funes the Memorious", which is also included, and have been Interested in reading it since. Altough I still have 2 or 3 more books to read.
Yes, definitely worth it. There are some great stories in that collection:
- The Garden of Forking Paths
- Pierre Menard, Author of the Quixote
- The Lottery in Babylon
- The Library of Babel
- Funes the Memorious
- The Secret Miracle
- Three Versions of Judas
- Death and the Compass
incidentally, you’re describing a key limitation of economic systems, whereby value as represented by price doesn’t reflect holistic utility to infinitely-complex humans and human societies. it’s true of basically everything, including stocks (efficient markets and all that), and forms the basis of a material critique of laissez faire capitalism.
The way I understood the work of von Neumann and Morgenstern on game theory, there is an extensive discussion of utility and the derived ordering on preferences.
I interpret recent work on behavioral economics as building on their work to call into question the claim that one can easily estimate such a utility function for an economic agent in a manner invariant to the internal state of that agent.
This train of thought seems like it should leave laissez faire capitalism in the dust.
yes, i'd heard it talked about in relation to environmental economics, and about externalities in general, e.g., "how do you price in externalities like pollution in relation to our emotional enjoyment of nature?"
utility is neat in theory, but seems to be messy in practice. it's one thing to spell out the relationship, but another to calculate an analytic solution (from my limited mathematical experience, navier-stokes comes to mind in this regard).
I'm not particularly well read in economics, and have not read anything that specifically addresses the difficulty of estimating utility. My view is rather derived from my readings on economics and related fields. The material that stands out the most in my mind are:
2. The Economic Naturalist (https://www.goodreads.com/book/show/629238.The_Economic_Natu...). It is a great compilation of economic edge cases which show that the notion of utility is not so easy to capture using the standard "narrowly self-interested economic agents" world view. It requires a lot of subjective interpretation.
4. The body of work around the Iterated Prisoner's Dilemma: (https://en.wikipedia.org/wiki/Prisoner%27s_dilemma#The_itera...). In particular we can see how the dynamics of simulations using rational agents diverge from the dynamics of experiments involving actual humans. This suggests that the utility assumptions used in economic analyses do not reflect whatever notion of utility that could actually apply to human behavior.
Relevant Freakonomics podcast with Maria Konnikova on her new book about luck, game theory, etc. They discuss von Neumann, and how he was actually a bad poker player, bud enjoyed the social aspect.
I am a mathematician, and at the same time I can't resist the temptation to purchase the occasional lottery ticket. What most people miss about the lottery is that there can be utility to variance - the opposite of ennui.
Have you guys read The Lottery in Babylon
https://en.wikipedia.org/wiki/The_Lottery_in_Babylon