Rational Actor model (a case study in putting your money where your mouth is)
As a side note, when I was having tea with her, the pleasant matron informed me that of the eleven flights that were up for raffle, one guy won 5 of them. He filled out hundreds of raffle forms, spending thousands of rupees. He set up a production line with his entire family filling out forms.
Probabilistically, it was worth it. There weren't all that many raffle entries, you could see them in the jars from which they were to be drawn. In addition, the cost of each ticket was very low, compared to the pay-off of things like 2 free first class tickets anywhere in the US on Continental. As a result, so long as the price of each ticket was less than the expected value of it paying off, it was rational for him to buy an extra ticket. Its just impressive that he did the calculation and actually acted on what he found.
In some parts of risk analysis they talk about how people are risk-adverse. That is, actual people are unwilling to take some risks even when the expected value is in their favor; that they feel the pain of loss more heavily than the happiness of success. Most people, acting irrationally, when confronted with a lottery like this would buy a bid or two and hope for the best, partially because their past failures to win lotteries make them think that they could never win a lottery. They console themselves when they lose with the knowledge that they only lost a little. Not this guy, though.
The fact that he bought so many tickets is doubly impressive because he apparently tried this same trick last year, and did not win a single one. Its to his credit that he came back a second year to do it. It represents an almost inhuman faith in the law of large numbers and the independence of random events. If it weren’t for the fact that it made other rafflers (a person who participates in a raffle) upset, I’d say it had potential to be a made-for-TV-movie.
Just as a side note, while people at the drawing were angry at the one guy for getting so many prizes, she didn't seem angry at him for gaming the system. More than anything, she seemed exasperated that he spent so much time. Its as if she thought: "if only he knew the right 5 tickets to buy, he could have saved himself a lot of trouble."
One thing I can question was his timing in buying the tickets. He came late in the day, half an hour before the raffle closed to buy his many tickets. I'm sure he did this so he could look in each raffle bin and buy more of the ones which he felt were under-filled. At the same time, however, if he had come in the beginning of the raffle, and bought all his hundreds of tickets, leaving them in the bin all day, I wonder if he could have intimidated people from ever signing up at all; I personally I signed up for the two raffles I did because I the bins were near empty and I liked my odds. If he could have intimidated small time people like myself in this way from the beginning, his odds overall would have been even better.
Perhaps he’ll think of that when sipping champaign in First class on one of his cross-country flights.
Probabilistically, it was worth it. There weren't all that many raffle entries, you could see them in the jars from which they were to be drawn. In addition, the cost of each ticket was very low, compared to the pay-off of things like 2 free first class tickets anywhere in the US on Continental. As a result, so long as the price of each ticket was less than the expected value of it paying off, it was rational for him to buy an extra ticket. Its just impressive that he did the calculation and actually acted on what he found.
In some parts of risk analysis they talk about how people are risk-adverse. That is, actual people are unwilling to take some risks even when the expected value is in their favor; that they feel the pain of loss more heavily than the happiness of success. Most people, acting irrationally, when confronted with a lottery like this would buy a bid or two and hope for the best, partially because their past failures to win lotteries make them think that they could never win a lottery. They console themselves when they lose with the knowledge that they only lost a little. Not this guy, though.
The fact that he bought so many tickets is doubly impressive because he apparently tried this same trick last year, and did not win a single one. Its to his credit that he came back a second year to do it. It represents an almost inhuman faith in the law of large numbers and the independence of random events. If it weren’t for the fact that it made other rafflers (a person who participates in a raffle) upset, I’d say it had potential to be a made-for-TV-movie.
Just as a side note, while people at the drawing were angry at the one guy for getting so many prizes, she didn't seem angry at him for gaming the system. More than anything, she seemed exasperated that he spent so much time. Its as if she thought: "if only he knew the right 5 tickets to buy, he could have saved himself a lot of trouble."
One thing I can question was his timing in buying the tickets. He came late in the day, half an hour before the raffle closed to buy his many tickets. I'm sure he did this so he could look in each raffle bin and buy more of the ones which he felt were under-filled. At the same time, however, if he had come in the beginning of the raffle, and bought all his hundreds of tickets, leaving them in the bin all day, I wonder if he could have intimidated people from ever signing up at all; I personally I signed up for the two raffles I did because I the bins were near empty and I liked my odds. If he could have intimidated small time people like myself in this way from the beginning, his odds overall would have been even better.
Perhaps he’ll think of that when sipping champaign in First class on one of his cross-country flights.
posted by Linton at 5:52 AM
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