[ExI] I know we moved on about psi

[Stathis Papaioannou]

2010/7/19 Bryan Bishop <kanzure at gmail.com>:

> I am wondering by how much the odds improve each day and whether or not the
> risk is any greater than traditional investment. There's a payoff between
> risk and rate of return on investment, of course, and playing initially with
> the 1-in-175-million odds for a Mega Millions game is pretty crazy (although
> maybe not crazy for the $1 it costs?). Still, if by investing $20M in
> tickets you're able to get a 40% chance of tripling your money (and 60%
> chance of just completely losing it of course), how does that work out? Hm.

40% * $60M = $24M, a 20% return on investment. That is extremely good,
although you will have to do it multiple times to be confident that
you will win (the more times you do it, the more likely it is that
your return will be 20%). Strangely enough, you can be more confident
of the return on the lottery than you would be with conventional
investment. Depending on what sort of lottery it is you might be able
to calculate the expected return exactly, while in conventional
investment such as on the stock market the return and its probability
are just educated guesses at best.


-- 
Stathis Papaioannou