The Lottery is a discrete distribution of probabilities over a set of states of nature. The elements of a lottery correspond to the probabilities of each of the states. A lot of theoretic analysis of choice under uncertainty involves characterizing choices as lotteries. It’s possible to win a lottery if you can guess all the numbers correctly. But can you be sure you’ll win the jackpot? Let’s take a look.
Lotteries can have many different formats. Some lottery games are fixed with fixed prizes (usually cash or goods), while others are unpredictable and risky to the organizer. In a standard lottery game, a set pool of numbers is drawn and players try to match three or more to win a prize. These jackpots can be huge in the US and are often the subject of headlines. Other lotteries allow purchasers to choose their own numbers, and multiple winners are possible with each selection.
Historically, lotteries were first recorded in the Netherlands in the 17th century. These public lotteries were created for public purposes, including raising money for the poor. In the 1740s, these lotteries helped finance the founding of Princeton and Columbia universities, and the University of Pennsylvania’s Academy Lottery. These lotteries are also mentioned in town records. The Dutch word loterie came from the noun “fate”.