Lottery is a process of assigning scarce but high-in-demand goods and services to paying participants by drawing lots. Examples include a lottery for kindergarten admission at a reputable school or a lottery for occupying units in a subsidized housing block. The most popular and common type of lottery dishing out cash prizes to paying participants is the financial lottery. The prize amount depends on the number of tickets with matching numbers. The term lottery was probably derived from Middle Dutch loten, or possibly a calque on the French word loterie (the latter being a diminutive of Middle Dutch lotinge). Lotteries have been used for centuries in Europe and are a popular form of gambling.
The lottery is a dangerous form of gambling, and it’s not just because of the odds. It’s also because it dangles the promise of instant wealth in an era of declining social mobility and crushing inequality. It makes people feel like they have a chance to get rich, but it’s a long shot.
The purchase of lottery tickets cannot be accounted for by decision models that are based on expected value maximization. However, it can be explained by a more general model that considers risk-seeking behavior and the curvature of utility functions defined on things other than lottery outcomes. I’ve talked to lottery players for years, people who spend $50, $100 a week on tickets. They defy the expectations that you would have going into the conversation, which is that they’re irrational and that they’ve been duped.