Questions for you:
- Are there situations in your working life where you are effectively buying hope rather than making a rational bet — investing effort or resources in something whose expected value is low but whose upside would be transformative?
- How does your organisation treat low-probability, high-upside initiatives? Do they get the same scrutiny as conventional investments, and is that appropriate?
- Can you think of a product or service your organisation offers, or could offer, that sells the experience of possibility rather than the probability of outcome?
Organisational applications:
The lottery premium and what people actually want: A lottery ticket is not primarily a financial instrument but a mechanism for accessing a mental state — the brief experience of imagining a different life. People knowingly pay above actuarial value for that experience.
Organisations that recognise this can design products and services around the experience of possibility rather than the delivery of probability. Understanding what experiential value underlies an apparently irrational purchase often reveals a genuine unmet need that standard expected-value analysis cannot see.
Context-dependence of risk appetite: The same people who avoid financial risk in most contexts will consistently buy lottery tickets. Risk appetite is not a stable individual trait — it varies with cost of entry, magnitude of upside, and cultural normalisation.
Organisations that assume fixed risk tolerance in their customers or employees are likely to be wrong. The relevant question is not “how risk-averse is this person?” but “under what conditions does this person take risks?”
Small bets on transformative possibilities: A portfolio of small, cheap bets on low-probability transformative outcomes is structurally similar to buying lottery tickets — and may be similarly undervalued by standard analysis if the value of maintaining optionality is excluded.
Teams visibly working on interesting long-shot problems attract and retain people differently from those exclusively optimising known processes. The rewards of the “lottery ticket” includes the signal it sends about what kind of organisation you are.
Further reading
On the psychology of hope and lottery behaviour:
Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein. Covers the history of lotteries and their relationship to expected value theory, with context for why lottery play persists despite being a losing bet by conventional financial measures.
Thinking, Fast and Slow by Daniel Kahneman. Kahneman’s treatment of probability weighting — the tendency to overweight small probabilities of large gains — explains the psychological mechanism behind lottery appeal more precisely than simple irrationality arguments do.
On context-dependence and what people actually value:
Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely. Ariely’s account of how context shapes apparently irrational decisions covers the lottery dynamic as part of a broader argument that human decision-making is systematically non-rational in predictable, designable ways.
On small bets, optionality, and asymmetric upside:
Antifragile: Things That Gain from Disorder by Nassim Nicholas Taleb. Taleb’s barbell strategy — maintaining exposure to large positive outcomes at low cost — is the most formal available framework for understanding when lottery-style thinking is genuinely rational rather than merely emotionally appealing.
The Lean Startup by Eric Ries. An organisational application of lottery logic: small investments that might produce transformative results, where the cost of each bet is deliberately kept low enough that many can be run simultaneously.
About the image
Not technically a lottery, but a shop sign in Italy for their football pools. The recolouring has left it looking like a chocolate bar, which I find hugely amusing.
Photo montage and photo by Matt Ballantine, 2026
Random the Book 