Strictly Eating Chances: You can’t eat chances? Oh yes you can!

I say this despite David Wasserman’s snide comment on the claims made by us lottery enthusiasts. We would say that where there are more qualified applicants than places available, a lottery’s the thing. Some will then win a place — “eat”— but everyone will benefit by having had the chance of winning.

But what is the value of a chance when you win nothing? Rationally we should conclude that the value of nothing is zilch, zero, nada.

In another swipe at advocates of lotteries for sharing Wasserman comments:

if it makes sense to treat an expectation as a good, it also makes sense to ask whether the value of that good increases the longer it is held by the recipient.

It’s nice to see a bit of sarcasm from a philosopher whose main concern is medical ethics!

Instead, I’d like to take up Wasserman’s challenge, and propose that your ‘expectation’ — your ticket to the lottery — can indeed be made more valuable by spinning out the process.

Take for example the way the TV hit show Strictly Come Dancing (in the US it’s called Dancing With the Stars) operates. They start with a dozen or so stars. Each week they dance competitively, and by a complex process one star is eliminated. Over the next weeks the process is repeated, one ‘loser’ every week until there are three left. It is then decided by a Grand Finale.

I take it as axiomatic the producers know how to give the public good entertainment value. That’s show business!

But wait a minute! Wasserman claims that a lottery ticket, especially a losing one is of no value. Tell that to the millions who spend good money on Lotto tickets every week! They are especially irrational because their expectation is always negative (apart from rare roll-over weeks). At least half the ticket money goes to ‘good causes’ not prizes.

But real-life humans are not the hyper-rational calculating machines of the economists’ fantasies. As the brilliant Israeli Nobel winning economists Khaneman and Tversky have shown, actual human beings have values beyond simple greed.

So yes, there is a value to the customers in Procedural Fairness as I point out in my book on Lotteries for Education. Having a chance does have a value perhaps as a manifestation of respect for the applicant. Surveys bear this out.

So let’s think of a better way to run a lottery to decide who gets their first choice of school when the desirable schools are over-subscribed.

Instead of a sudden-death one-off lottery which decides all places at all schools, how about starting with a draw for a quarter of the available places? Winners would then be notified, and have a few days to accept or reject the offer.

The following week, the next tranche of places could be decided, and so on for a total of four weeks.

So a good proportion of applicants could then live on in hope — a commodity of some value. There might even be benefits in allowing extra time for reflection. Early winners will generally get their first choice. Those lingering on into later stages will have a chance to come to terms with missing out on their first choice.

Again, a form of human ‘irrationality’ is at work. There is evidence that even if you “don’t get what you like”, it can often be a case of “Liking what you get”.

So we can add to the sum total human satisfaction by stretching out the time-frame of the lottery allocation process.

In comparison, a quick one-off lottery which decides all places will be less satisfactory for the applicants.

Worst of all is the post-hoc lottery when the adjudicator announces “We’ve had a lottery and here are the names of the winners.” Think about it. Process matters. People value fair, open and honest procedures. They can also value being given time to adapt to decisions.

———————————-

Wasserman, David 1996 ‘Let them eat chances: probability and distributive justice’ Economics and  Philosophy 12 29-49  Can be found in Peter Stone’s Lotteries in Public Life: A Reader

Conall Boyle 2010 Lotteries for education: Origins, experiences, lessons Exeter, Imprint Academic

There is a very good recent (Dec 2016) book about Khaneman and Tversky by Michael Lewis called The Undoing Project: A Friendship that Changed the World. Recommended!

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