Often considered among the more irrational human behaviors, the purchase of lottery tickets may provide insight into why people engage in seemingly unwise spending. The last days of the year are often full of hope, emotion and expectations. Perhaps this is why behavioral economists see the final months of the year as a good opportunity to assess why many people buy lottery tickets at least once a year.
In the heart of Turkey's capital Ankara, hundreds of people line up to buy lottery tickets every year from vendors in Kızılay Square, making for a potential open-air laboratory to glean insight into these behaviors. The highest prize in the New Year's lottery organized by the National Lottery Administration which recently privatized its lottery ticket division is TL 100 million ($13.4 million).
In interviews with Anadolu Agency (AA) on why they braved the central Anatolian cold to get their hands on a potentially enriching ticket, buyers gave a myriad of answers varying from economic hardship to family tradition to a quick gift idea to spread New Year's cheer.
According to one weathered vendor, this year saw particularly high ticket sales as people increasingly waited hours in a queue: "Demand for tickets is high compared with last year. Eighty percent of tickets have already been sold. It's always like this in times of crisis; people buy more lottery tickets."
Waiting in line, one buyer would not allow previous losses to dampen their hopes. "I buy tickets from the 1,000 series every year. I haven't won yet, but I'll buy it until I win."
For others, the lottery has become a cross-generational heirloom. "Buying lottery tickets has become a tradition now. Just like a tradition passed from father to son," said one man. "My grandfather made me buy tickets; I had no intention of buying them," said another, taking part in an apparently not-so-voluntary family custom. Some have gleaned that despite the low odds of winning, the thoughtfulness to possibly make friends and loved ones rich is priceless: "I buy lottery tickets as a New Year's gift for my friends. It makes me happy to see the joy in their face."
Others still see the payoff as the main motivator, with one person saying: "Although there's a small chance of winning, I'll buy it anyway. It's a hope." Further, when given the "rational" choice to sell their tickets at double the price, most people were surprisingly candid. The answer, more often than not, was: "No, they're mine, I'm taking my chances."
These responses point to the apparent truth in the ideas of Israeli economist and psychologist Daniel Kahneman, who in his famous prospect theory posited that the satisfaction derived from any financial decision is not only economic but also psychological. They also appear to show that lottery ticket buyers are, in fact, quite rational in their expectations of the results of their gamble, well aware of their little chances of winning but finding the process itself entertaining. Choosing the numbers on their possible golden ticket, they seem cheerful, excited, and hopeful – even more so when playing together with family and friends. However, this does not fully support the second part of Kahneman's theory, which argues that people tend to overweigh the small chances of winning the lottery.
Though aware of the negative consequences, people often indulge in excesses that provide momentary happiness on certain occasions, like New Year's, when they allow themselves to, for example, overspend or overeat. Though seemingly irrational, many would argue that they actually make us happy. Thus, along with the monetary utility of winning a prize, there may also be a non-monetary utility of the possibility to win, regardless of the payoff's size – in other words, the joy of the game.
