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Human beings are not wired to grasp the concept of probability. A chance of winning a lottery, sometimes 1 in 175 million, is not something that bothers us.
The Lottery ticket, selling in billions per year, remains a popular sport in the world, and is something whose appeal has increased during the recent recession.
The steady appeal of the lottery is due to various psychological tricks by the marketers: suspension of logic and reason and the dreams that it sells.
Using the variable rewards concept of psychology, the marketers ensure that people keep buying their tickets for years, by introducing smaller wins with much better odds. This helped lottery buyers experience the thrill of a win.
The odds to win are so small that winning does not even feature in our decision matrix of buying a ticket. The game of lottery isn’t played on logic, or for investment, but for entertainment.
For as little as two dollars, a person dreams of getting a chance to win thousands of dollars, and that dream is worth the price of the ticket. The bigger the jackpot is, the more the dreams are fed.
Different price points, themes and designs of lottery tickets provide variety and reduce player burnout.
The creative concepts keep things fresh and exciting for regular players, making them experience a sense of possibility. Having lottery tickets placed at ubiquitous points facilitates impulse buying by reducing friction.
Many lotteries play to the basic psychological error of the brain which correlates a near miss with better luck.
They allow players to choose a combination of four or five numbers and players experience an illusion that they almost won. In reality, the odds of winning keep getting worse with each successive number batch.
Players, and shoppers in general, think myopically about the purchase being made.
If they spend $1 buying one ticket while waiting for their turn at the supermarket checkout counter, they may buy five or six tickets in a month. However, if they ‘bracket’ their purchase together and consider buying five tickets with the $5 that they have, they are not likely to buy them all together.
The framing of the winning amount (You could win a hundred million dollars!) creates an anchor in the player's mind and the focus becomes the large sum of money.
The price of the lottery ticket (a dollar) seems inconsequential in front of the large figure already anchored in the minds.
The human mind is sensitive to loss, and has a natural feeling of comparison towards those who have more, fueling the emotions of fear and regret.
In the Netherlands, a ‘postcode’ lottery which awards participating residents of a certain winning postcode every week, made use of the non-participating residents feeling of jealousy and loss due to being left out of the win to further advance their ticket sales.
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