"Lottery players do not tend to choose numbers at random", writes economist Robert Östling as a Swedish player wins record jackpot.
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This article was published after a national lottery contestant in southern Sweden hit the jackpot on Saturday with a record 214.6 million kronor ($29.5 million) win.
Playing the Swedish lottery may at first sight seem quite boring. It is simply about picking seven numbers, and chance determines whether you win. People are complex beings, however, which make the lottery a lot more interesting than that.
Firstly, it has been shown that lottery players do not tend to choose numbers at random. Jerker Holm, for example, revealed in an article in Ekonomisk Debatt that the number 21 was twice as popular as number 36. In other studies (see Holm’s article for references), it has also been shown that certain combinations of numbers are particularly common, for example 1 2 3 4 5 6 7. As long as other lottery players do not choose numbers at random, one should pick numbers that others do not.
Although this does not increase the chance to win, it reduces the risk of having to share the jackpot with others if you do get lucky.
Holm even showed that the expected return from playing the lottery is positive if one chooses unusual numbers – despite the fact that the Swedish gambling authority Svenska Spel only pays out 45 percent of all total bets. (The catch is that it may take time to get all seven numbers right. If you play two lines a week it will take around 150,000 years before you can expect to bring home the jackpot.)
So, if you are going to play the lottery, it is therefore important to know the number – and combinations of numbers – which are particularly commonly played.
The Swedish gambling authority, however, does not appear to share this information with us. Under the heading “Numbers Statistics” on the web page, they instead offer a lot less relevant information, namely which numbers have been drawn over the last six months.
Why do they report this information? The well-meaning interpretation is that they want to convince lottery players that drawings are random and that each number comes up with about the same frequency. A more sinister explanation is that Svenska Spel is aware of people’s tendency to erroneously believe that numbers not drawn in a long time are more likely to come up in the future (something that usually goes under the name of “gambler's fallacy”) and that it is to make the game more attractive to players who make this mistake that Svenska Spel chooses to disclose this particular information.
Last week I wrote about how competition can lead to increased pressure on companies to create confusion among consumers. Naturally, even monopolies can gain from creating confusion by taking advantage of people’s cognitive limitations. I will not pass judgment whether this is the case here, but Svenska Spel’s balancing on a razor’s edge between social responsibility and profit maximization has previously been discussed at Ekonomistas.
Assistant Professor, Institute for International Economic Studies, Stockholm University
Published in collaboration with the blog Ekonomistas.
Translation by Jonas Vesterberg,
U.S.-based journalist and communications consultant.
Last Updated (Tuesday, 30 March 2010 16:28)