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ERIC Number: EJ850650
Record Type: Journal
Publication Date: 2005-Jul
Pages: 18
Abstractor: As Provided
Reference Count: 6
ISBN: N/A
ISSN: ISSN-1069-1898
Powerball, Expected Value, and the Law of (Very) Large Numbers
Mecklin, Christopher J.; Donnelly, Robert G.
Journal of Statistics Education, v13 n2 Jul 2005
In this paper, we consider some combinatorial and statistical aspects of the popular "Powerball" lottery game. It is not difficult for students in an introductory statistics course to compute the probabilities of winning various prizes, including the "jackpot" in the Powerball game. Assuming a unique jackpot winner, it is not difficult to find the expected value and the variance of the probability distribution for the dollar prize amount. In certain circumstances, the expected value is positive, which might suggest that it would be desirable to buy Powerball tickets. However, due to the extremely high coefficient of variation in this problem, we use the law of large numbers to show that we would need to buy an untenable number of tickets to be reasonably confident of making a profit. We also consider the impact of sharing the jackpot with other winners. (Contains 5 tables and 3 figures.)
American Statistical Association. 732 North Washington Street, Alexandria, VA 22314. Tel: 703-684-1221; Tel: 888-231-3473; Fax: 703-684-2037; e-mail: asainfo@amstat.org; Web site: http://www.amstat.org/publications/jse
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A