Monday, September 9, 2013

How do you "sell" a lottery with a -50% return?

Here's how:

Our proclivity for fantasy makes us an easy target for advertising. Lottery commercials depict winners in stretch limousines, counting stacks of money, dressed in evening gowns and tuxedos, sipping champagne. The commercials hit home because fantasizing about winning the lottery activates the same parts of our brains that would be activated if we actually won, notes Daniel Levine, a professor of psychology: "The motivational areas of the brain can be heavily influenced by vivid daydreaming."
But even fantasy will drop its hold on us if we always lose. Research has shown that positive reinforcement is key in virtually all of the successful lotteries, notes Williams. Lotteries that allow players to choose combinations of four or five numbers from a total of 60 numbers are popular, he says, because many players experience "the near miss," which creates the illusion that they came close to winning the multimillion-dollar jackpot.


  1. As one trademarked lottery slogan goes, “Hey, you never know.” Somebody has to win. But to really understand why hundreds of millions of people play a game they will never win, a game with serious social consequences, you have to suspend logic and consider it through an alternate set of rules—rules written by neuroscientists, social psychologists, and economists. When the odds are so small that they are difficult to conceptualize, the risk we perceive has less to do with outcomes than with how much fear or hope we are feeling when we make a decision, how we “frame” and organize sets of logical facts, and even how we perceive ourselves in relation to others. Once you know the alternate set of rules, plumb the literature, and speak to the experts, the popularity of the lottery suddenly makes a lot more sense. It’s a game where reason and logic are rendered obsolete, and hope and dreams are on sale. (Piore)
    Piore, Adam. Why We Keep Playing the Lottery. 1 August 2013. .

    Suzette Monteverde, Empire State College, Dr. Singh, ECO-65155X

  2. In this article author describe of the odds of winning the lottery, despite the fact of garners tremendous sales
    The focus is being removed from the buyers’ chances of losing 60 million to 1 and being placed on the buyers’ ability to win 1 to 60 million. As the author states, the marketing strategy used is to appeal to public’s fantasy causing them to be more risk tolerant and buy the lottery, ignoring all the uncertainty involved. This type of framing is extremely damaging especially so for someone in a financial bind, and causes them to lose sight of the real situation. They are solicited to dream through advertisements, and think that they can actually taste winning the lottery, thereby putting an end to their financial woes. Others, not necessarily in a bind, but with dreams of an improved financial life, will dream and purchase as well. If lottery buyers realize that their real opportunity to win will take over 20 years, they would assess it at its true value, 60 million to 1.