‘Expected value’ is the notion of trying to assess the value of anything with an uncertain monetary worth – be it a share in a company or a lottery ticket
Here in the UK, your odds of winning the National Lottery do not change. When, for example, you could pick from 49 numbers, your chances of scooping the jackpot – that is, of your six numbers exactly matching the six drawn at random by ‘Arthur’ or one of the other three machines – were always 1 in 13,983,816. Since 10 extra numbers were added in 2015, they now always stand at a tantalising 1 in 45,057,474.
How MIT students made a fortune
Not all lotteries operate in the same way, however, and an unusual feature of the Massachusetts state lottery allowed a syndicate of MIT students to win millions back in the middle of the last decade. Having spotted that, if the main jackpot was not claimed, it was ‘rolled down’ to increase the lesser prizes, they calculated that on roll-down days the mathematical value of a $2 ticket could actually be as high as $5.53.