Powerball and Mega Millions sell exactly the same fantasy AFAICT. How can one charge $2 when the other only costs $1?
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Anchoring. Some people are buying the premium fantasy while others are buying the value fantasy.
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Apple should disrupt the market by selling a $100 lottery ticket.
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There is some math involved, just the wrong kind. Many people compare jackpots, but ignore probabilities and never get to expected winnings.
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The minimum jackpot for powerball is 40 million, minimum for mega millions is 15 million. Many willing to pay more for the larger fantasy.
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Expected utility of 10M$ is more than 1$ times 10M
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are u being intentionally obtuse? lottery players are effectively innumerate, so ofc have reduced differentiation by price
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True that people rarely perform effective analyses, but badly wrong to assume lottery always irrational on this surface level. 1/
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Optimizing for $ it's obv net negative, but no reason to do that. Optimize for quality of life / social status / etc. becomes ... 2/
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... strongly net positive. Nonlinear correlation of $$ to QoL etc. makes all the difference. 3/3
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The skills necessary to know to not play the lottery are different from the skills necessary to determine which game is preferable.
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It's comparative, just like all happiness.
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Well at least once they did.
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actual answer: powerball used to be $1, they raised it to $2 and lowered the odds (added more possible numbers) to increase prize pools.
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the idea being that it would reach large (>$300-400M) jackpots more frequently and attract casual players, who show up when jackpots get big
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Could be expected payouts with a very poor method of calculation. I.e. one has a bigger number on it.
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This may come as a shock but not everyone acts completely rationally all the time.
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Saturation? We see the same number for both because that is how many people buy lottery tickets
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There is temporary happiness in self deception. Imagining ourselves as heroes or being rich. That's what people are buying.
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