The Mega Millions top prize for tonight’s, July 26th, 2022, drawing marks the fourth-largest lottery jackpot ever clocking in at a whopping $830 million and counting.
If you’re like millions of other Americans, the possibility of winning this life-changing money may seem worth the $2 gamble of buying a lottery ticket of your own, but lottery officials urge that “players should think of their $2 bet as nothing more than a chance to dream…”, referring to the awfully low chances of actually winning the grand prize.
In fact, your chances of winning are minuscule, at about one in 302.5 million. But if the chances are SO low, what drives people to think that their $2 bet— among the millions of others — will bring them a staggering win?
Behavioral economic theory may have an explanation for this bizarre line of reasoning when it comes to playing the lottery.
Economists, Amos Tversky and Daniel Kahneman, pioneered the study of behavioral economics, identifying four main heuristics that explain the way people approach decision-making. Heuristics, simply defined, are mental shortcuts that help people to make judgments and decisions quickly.
The availability heuristic: where recent memories are given greater significance, is at play when considering why people cling on to the hope of winning the lottery, despite the mathematically low probability. Because an event is more easily recalled or ‘recent’ in the mind, the perceived chance of it occurring again increases significantly.
Due to elevated media coverage, social media buzz, and Mega Millions advertising seemingly everywhere, people are being bombarded with news about the record-breaking jackpot daily and, as a result, are easily able to recall past news of the big win changing peoples’ lives. This inflated sense of celebration is unforgettable and pushes people to perceive their own chances of winning as heightened, despite what logic may suggest.
This behavioral phenomenon coupled with recessionary market behavior makes for a perfect storm. In, “Lottery-itis!,” Goldbart and co-author Joan DiFuria wrote on the Psychology Today website that in times of economic stress, playing the lottery is a way of coping with financial anxieties and uncertainty. A $2 ticket is a low barrier to entry and allows most all people the chance to play, despite their financial standing. With the stock market rapidly crashing, inflation hitting record-breaking highs, and many families still recovering from the economic impact of COVID, reminiscing on uplifting stories of lottery-winners of the past provides an escape and chance to wonder: miracles happen to others, so why not for me?
If you find yourself yearning for a win, financial experts recommend erring on the side of caution when it comes to your finances. New fintech apps such as PrizePool provide a safe way to participate in the fun of winning cash prizes while also protecting you hard-earned money. PrizePool’s FDIC-insured accounts ensure that you don’t have to lose any money while playing for the chance to win a $10k grand prize every month—now, that is something worth betting on!