Monday, January 11, 2016

Is Gambling Irrational?

In my post, No Powerball Winners, Jackpot Grows to Estimated $1.3 Billion; Does It Makes Sense to Play?, I make the point that economists who attempt to determine whether a lottery bet is rational, based on the positive or negative value outcome, ignore the minimal marginal value of the funds used in the bet relative to potential outcome.

Dr. Michael Edelstien in the comments to the post points to  an essay by David Ramsey Steele, “Yes, Gambling Is Productive and Rational”, Liberty (1997) (Reprinted in A Rhetoric of Argument by Jeanne Fahnestock & Marie Secor.)

Here's is an excerpt from A Rhetoric of Argument introducing Steele's article which shows Steele's argument in line with mine, in addition to the more common argument that gambling can be done for entertainment purposes:


1 comment:

  1. I live in Las Vegas and unfortunately the gaming lobby does not permit power ball in Nevada. Yet another example of an industry using the armor government to prohibit competition. But I digress. For me to buy a Powerball ticket I have to drive across state lines. I'm curious whether my chances of dying in a car accident exceed that of winning. Doesn't mean I won't try, but it's an interesting question. Certainly if I could buy a ticket here in town, I'd probably do it.