<i>Experts aren&#x27;t entirely sure why &quot;those who can least afford it play the most,&quot; as German sociologists asked in a 2013 paper. The pessimistic, and perhaps condescending, view is that the poor and less-educated don&#x27;t have the intellectual gifts to appraise the odds, but middle-class and rich people play the lottery too.</i><p>This perspective is deeply flawed. If humans obeyed a risk adjusted rate of return strategy and rationally discounted for the future, human behavior across the board would be profoundly different.  The lottery is only one example of many.<p>Any portfolio of early stage startups is destined to perform worse than the S&amp;P500, as is any portfolio of series A startups.  As is any portfolio of lottery tickets... but there is always that winning ticket, that Facebook, that Google.<p>There have been very few big homerun startups. The rest would fail to lift the average above the S&amp;P.<p>In an environment where the future seems fairly certain (poverty, affluence, whatever) there is lots to be gained by rolling the dice and experiencing a bit of risk.  Lotto is less fun than a startup, but it scratches the same itch.  It lets you ride the emotional roller coaster and imagine the greatness that will one day be yours.<p>Startups are a superior version of lotto because you get to be the CEO or the CTO and someone invests their money to help you build a team and get traction, etc.  So your bet with destiny is being underwritten by others.  You get advisors, board members, and metrics, and essentially spread the thrill of the tumbling balls across however long your runway lasts.   The superiority of startups is why young affluent people do them, and why poor people play lotto.<p>The urge to take on risk is what got humans onto ships, rockets, and bathyspheres. It&#x27;s the unique human ability to reason probabilistically and take a leap, to undertake a calculated risk, and to engage in an exciting dance with destiny.<p>For centuries and in pre-enlightenment times, people believed that all of life was fated and that one&#x27;s lot was destined from birth.<p>When we appreciate the emotional thrill of risk we start to see that it&#x27;s part of the glorious awakening of the human sprit birthed in the enlightenment.  When a dejected person puts his last quarter into a slot machine, we are not seeing hopelessness, we are seeing hope in its most unfettered form.  Even if he loses that person will pick himself up and dust off and be ready to try again, for fate is on his side.  This stands in stark contrast with the previous worldview in which the quarter would be saved and a prayer offered up, which has far smaller odds of success than the slot machine.