The Psychology of the Lottery
The lottery is a form of gambling that involves paying a small sum to be given the chance to win a large prize. In the United States, most state governments run lotteries. A surprisingly large number of people play these games, even though the odds of winning are very low. In fact, some people spend a substantial part of their incomes on lottery tickets. But why do they do it? What is the psychology behind their addiction to the game?
A recent article in the journal Science offers an explanation. The article, by Dan Cohen, argues that modern lotteries are not just games of chance. They are a form of social engineering that attempts to balance the needs of a state’s citizens. The problem, he writes, is that the lottery inevitably runs into trouble because of the very nature of gambling: the more you play, the more likely you are to lose. The result is that lottery commissions are not above using psychology to keep people coming back for more. Their techniques are no different from those of tobacco companies and video-game manufacturers, he adds.
Cohen’s argument begins in the early nineteen-sixties, when growing awareness of all the money to be made in the lottery business collided with a crisis in state budgeting. For states with generous social safety nets, balancing the budget became difficult without raising taxes or cutting services, both of which would be unpopular with voters. Lottery advocates, no longer able to sell the lottery as a silver bullet, ginned up a new strategy. Instead of arguing that the lottery would float most of a state’s budget, they started to argue that it could cover just one line item: usually education, but sometimes elder care or public parks or aid for veterans.
In this new incarnation of the lottery, the prize pool is often smaller than in earlier times, and prizes are given away over a period of time rather than immediately. The idea is to spread the risk over a broad base of participants, so that a few big winners can help offset the inevitable losses. This is a common feature of gambling, but it does not hide the regressivity of the game, which benefits those who are richer than average.
The practice of distributing property or other goods by lottery dates to ancient times, with Moses being instructed in the Old Testament to divide land among Israel’s tribes by lot and Roman emperors giving away slaves through such a draw. In the United States, the Continental Congress used a lottery to raise funds for the Revolutionary War and later lotteries helped build Harvard, Yale, Dartmouth, King’s College (now Columbia), William and Mary, and other American colleges.
Nowadays, most Americans play state-run lotteries. The typical ticket costs $1, and you can select a group of numbers or have machines randomly spit them out for you. Winnings are paid out in an annuity payment or a lump sum, depending on the rules of the particular lottery. The annuity payment is generally much less than the lump sum, because of the taxes and other expenses that must be deducted from the prize pool.