Myths of the big jackpot

You’ve probably heard the Powerball jackpot is the largest it’s been in the 20 years of helping people part with their money. That, alone, may have motivated you to buy a ticket.

One question: Why now?

“People visualize this exciting big outcome, it’s more salient to them,” Barbara Bickart, who teaches consumer behavior at Boston University, told the Boston Globe. “My sense is that there’s a large group of people that don’t normally buy tickets. When they see the jackpot that big, they say, ‘This is one I don’t want to miss out on.'”

Powerball is a great chance to observe the strange behavior of humans, and not just their poor math skills.

For example, last weekend the Powerball jackpot was $325 million and while it provided a little interest, it didn’t send people scurrying to the store to buy a ticket. Today, it’s up to $500 million and people are jamming the stores to get a piece of the action.

So, $325 million was chump change? Two weeks ago, by the way, it was $185 million.

Also, by waiting until more people were buying tickets, you actually waited until your odds of winning got worse.

If you win and take the one-time payout — and you know you will — the total amount you win is “only” $221,813, 500 — or roughly $100,000 less than the total jackpot that didn’t interest you a week ago.

And, just for the record, taking the 30 payment annuity would give you a little over $11 million a year after taxes in Minnesota.