taken as given that some people have different utility functions, can the lottery make sense?
Obviously. Most folks don’t consider the decision to watch TV an hour or two a day stupid. Cable costs about $1/day, and folks get some middlin’ amount of pleasure out of it. A lottery ticket can, I believe, cost about the same. Do people get more or less pleasure from a lottery ticket than from a marginal hour of TV? The principle of revealed preference suggests that they get more. If you’ve got something that costs $1/day and takes 5 minutes of work to deliver more joy to the average person than a lottery ticket, go off and sell it. If you actually sell it, then you’re right. If you either can’t come up with such a product, or can’t succeed in selling it, then you’re wrong, and your product is less pleasing. Either way, don’t call the consumer stupid. His job is just to like what he likes. Call yourself stupid. You’re the one who simultaneously insists that the current mousetrap is obviously defective, and yet you can’t build a better one. This entry was posted on Friday, April 13th,
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