A lottery is a game in which numbers are drawn to determine a prize. Often, the prizes are large cash amounts. In some cases, a percentage of the winnings are donated to charitable causes. Lotteries are common in the United States, where they have a long history. Despite the fact that the odds of winning are extremely low, Americans spend over $80 billion per year on tickets. This money could be better spent building emergency savings or paying off credit card debt.
People buy lottery tickets because they want to experience a thrill and indulge in a fantasy of becoming rich. The purchase of lottery tickets cannot be accounted for by decision models based on expected value maximization, as the ticket costs more than the expected value. However, more general utility functions that are based on things other than lottery outcomes may explain why people buy lottery tickets.
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