Stop Buying Lotteries. Here Is Why
Let’s look at the following two games:
A: you pay $6 to flip an unbiased coin, and get $8 if it lands on head. Nothing otherwise.
B: you pay $3 to flip a biased coin. With probability 0.0001 it will land on head and you get $1000. Otherwise, you get nothing.
Game B is way more attractive than Game A, for a lower entry fee and a potentially much higher…