Many people play the lottery, contributing billions to state coffers annually. They know the odds of winning are very low, but they continue playing anyway because they think there is some non-monetary benefit to the exercise: entertainment value, a little hope, or even the chance that they will win big and transform their lives. In the end, they rationally decide that the disutility of a monetary loss is outweighed by the expected utility of the hoped-for outcome.
Lotteries have long been a popular way to raise money for public projects. The Continental Congress used them to fund the Revolutionary Army, and Alexander Hamilton pointed out that “everybody will be willing to hazard a trifling sum for the chance of considerable gain.” But as states began looking around in the late twentieth century for solutions to their budgetary crises that would not enrage an anti-tax electorate, lottery proponents were forced to address the moral objections that had long been voiced against gambling.
They dismissed those concerns by arguing that people were going to gamble anyway, and the government might as well collect those profits in the form of a lottery. This argument had limits—by its logic, governments should also sell heroin—but it offered moral cover for people who approved of state-run lotteries.
Lotteries are now a common fixture in the lives of many Americans, with the average American spending more than $80 per year on tickets. And although the majority of players say they are in it for fun, a few studies suggest that some play because they have developed what Cohen calls a “learned optimism”: They’ve come to believe that, for better or worse, the lottery really is their last, best, or only chance at a new life.