At the end of the last post I flippantly mentioned that the Lottery is an easy way to take money from people who are bad at maths.
The Maverick Philosopher has recently posted about the poor evaluational abilities of The Lottery Player. In short he claims that they both overvalue and undervalue money:
The lottery player, therefore, overvalues money in that he thinks it will provide things it cannot possibly provide: happiness, satisfaction, meaning, love. But he also undervalues it in that he wastes it on lottery tickets!
Whilst I don’t think Bill is wrong here, I think there is an alternative way to view what is going on that sheds more light on the matter. My suggestion is that the lottery player undervalues what he or she now has, and overvalues what he or she might have in the future.
She overvalues a future possibility in two ways. Firstly, she overvalues being in a position now that possibly she might win a lot of money in the future. She thinks that such a state of affairs is worth spending money on(buying tickets) to have now. I suggest that there is very little value in having this modal property (as philosophers would put it) i.e having the property that you might win the lottery in the future and become rich, given just how slim a possibility it is.
Secondly, she overvalues the sate of affairs in the future of being very rich. I think this for very much the same reason that Bill thinks this: it will not bring ‘happiness, satisfaction, meaning, love’ etc.
So she says ‘isn’t it great that I might win the lottery and become very rich?’ and I say no, its not that great. The chances are stupidly slim and it is not worth spending money on.
Then she says ‘wouldn’t it be great to win the lottery and become very rich?’. And again I say, no, not that great.
Ok, so what of undervaluing? The Lottery Player undervalues what he has now. He has a certain amount of money now, and a certain way of life that that money affords. He undervalues the riches that he currently has (and it is riches, relative to much of the world) by using some of it to try and obtain something else in the future via lottery tickets which are surely worth considerably less than he pays for them (given the above points).
It is a bit like the guy who ends every meaningful relationship that he gets into because the girl doesn’t look like the woman on the front of his Lads Mag. He overvalues the (very slim) possibility of being in a relationship with That Girl (it would surely disappoint) and undervalues the meaningful relationships that he drops along the way.