Lotteries are often described as “a tax on people who are innumerate”. The idea is that any rationalist would not play a lottery, because the return on investment is shoddy—negative, indeeed, stunningly so. Back to the post office savings account then.
But hang on there! Is this really why people play lotteries? Often the driving force is the remote chance of a truly life-transforming event, which is not adequately measured by the ROI.
The interesting observation is that this argument also works for events with negative consequences. Indeed, we are accustomed to this kind of reasoning about negative events. For example, people will readily argue that, whilst they know that the chances of a plane crash are minuscule, nonetheless they aren’t going anywhere a damn plane—because the consequences of being in a plane crash, however remote, are horrifying. Again, a life-transforming event, but one with bad rather than good consequences. The behaviour seems to be controlled by the same mechanism—I wonder if a carefully controlled experiment would show that the underlying structure of thought is basically the same?