Economic Analysis of Business Practice
I actually read about this a few weeks ago. I find it crazy that people win the lottery and completely ruin their lives with the money. If it were me I think the hardest choice I would have to make would be- lump sum, or annuity payments? I don't need a lot to be happy so I'd set myself up with a nice house at the beach and live out my days in relaxation...
Seems funny when I first read about it, but then I can't help thinking how some people nowadays don't give a damn about investing and taking care of their future. If I ever win the lottery, I will setup my own crime scene clean up business and payout all my debts. treating my family with a vacation would be nice, but I wouldn't use up all the money partying and celebrating.
Who buys lottery tickets? At face value from this news report it would appear to be individuals who are likely to be risk-inclined. The outcome was as if having won the lottery imparted on the recipients a false sense of security with incentive to engage in even risker behavior. “Once you [are] insure[d], the cost of getting into an accident goes down, so we would expect to see more accidents (Froeb, 2014:234).” There are many news articles about lottery winners and almost just as many highlighting those winners who’ve come to consider their windfall as a curse. The author of an article in Forbes explains:“I’ve noticed there are predictable patterns – patterns of thinking and behaving that can explain how a multimillion dollar lottery winner can call her money a curse just a month after winning. Immediately before or right after a sudden wealth event such as winning the lottery, many clients experience an almost out-of-body feeling […] They are exuberant. It’s an exciting time and they feel like they are on top of the world. Anything and everything is possible (Pagliarini, 2013).” I wonder just how much money the brothers had to spend for home repairs and medical bills after the incident. $75,000 or more? References:Froeb, McCann, Ward, Shor: (2014) Managerial Economics. A Problem Solving Approach, Ohio: South Western Cengage Learninghttp://www.forbes.com/sites/robertpagliarini/2013/09/27/why-lottery-winners-crash-after-a-big-win/