A possible explanation for why one would participate in a lottery:

What if $5 per week for the rest of their life doesn't impact an individual's standard of living, but $10 million would drastically improve it?

Does it then make (more) sense to participate?

Not in a strictly expected value sense, no. It's never going to be a rational choice from an financial point of view (i.e. there is always something else you can do with the $5 with better expected returns).

But if you get some other value out of it you place at least $5/wk utility on, sure. Maybe you get more utility out if it than a movie a month, or whatever.

I'll buy the occasional $10 scratcher, and then wait like a week to scratch it all off. The $10 is worth getting to ponder what I'll do with my massive windfall for that week!

Already maxing my ROTH and 401K so I figure it's like $80 a year well spent to entertain the phantasy.

That depends on the probabilities involved. If you send me $5/week, I might decide to give you $10 million one day. I don't have $10 million and I don't think I would want to give it away if I got that kind of money, but it could happen. Are you interested? Do you think anyone would be?

If you were regulated like a state lottery, people would be interested - they already are.

I don't think most people even consider the odds when playing the lottery.

The odds still matter. If no one ever won my lottery, I think people would eventually stop playing.

Lotteries are rational for the same reason that insurance is rational.

Insurance on the face of it is irrational -- insurance companies make money, therefore buying insurance is paying a premium above what the expected reimbursement is over the lifetime of the insurance. It's a reverse lottery; the expected outlays exceed the expected returns.

What you pay the premium for in insurance is to reduce downside variance.

What you pay the premium for in a lottery is to increase the upside variance.

yes i agree with these sentiments but the statistics involved are vastly different. The probability of a life-altering event is a lot greater than winning a lottery.

Reverse solidarity is not a problem. Its that lotteries are economically inefficient: what the 1 person gets is less than the sum of the parts, that is truly destructive.

OTOH, people pay for the dream of winning the lottery, which has some value, adicts withstanding.