... probability distribution of getting three numbers and six numbers, as these are the smallest and largest prizes. If you buy the lottery ticket for £1, you will have a wealth distribution consisting of w, the original wealth, £7million if you win (assuming this will mean w is an insignificant amount compared to £7million) w+£10 or in the most likely event of not winning at all w-£1. 'The thing that matters, is the consumption that money can buy that is the ultimate 'good' being chosen'1. So if the expected return is lower than the actually than the actually stake why do people play? 'The standard economic framework for analyzing decisions in the face of risk and uncertainty is the expected utility model'2. So this says that the utility gained from undertaking a risky activity can be measured by the expected utility associated with the activity. The fact that outcomes of this ...

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