Adam Piore examines the psychology of playing the lottery:
Carnegie Mellon’s [Professor George] Loewenstein and colleagues demonstrated it’s possible to change how many lottery tickets people will buy by making them think
—or not think—about their purchase in a larger context. The researchers gave one group of study participants $1 at a time, five times, and asked them if they wanted to buy a lottery ticket. They gave a second group $5 and asked how many tickets they wanted, while a third group received $5 and was told they had only two choices: they could spend it all on tickets or not buy any tickets at all. The people in the first group purchased twice as many tickets as those asked explicitly what percentage of the $5 they wanted to spend on tickets. Members of the all or nothing group opted for no tickets 87 percent of the time.
One of the things the experiment shows is that lottery players are often “thinking myopically,” says Romel Mostafa, who co-authored the 2008 study with Loewenstein, and is now an Assistant Professor of Business, Economics, and Public Policy at Ivey Business School, Western University. “We think about these purchases in one or two at a time. But when the decisions aggregate over time, it adds up. And if I were to bracket the spending over a longer period of time, I would not have bought it in the first place.”
(Photo by Flickr user DaGoaty)
The Dish 