Calculating a break-even lottery price

Simulations allow us to ask more nuanced questions that might not necessarily have an easy analytical solution. Rather than solving a complex mathematical formula, we directly get multiple sample outcomes. We can run experiments by modifying inputs and studying how those changes impact the system. For example, once we have a moderately reasonable model of global weather patterns, we could evaluate the impact of increased greenhouse gas emissions.

In the lottery example, we might want to know how expensive the ticket needs to be for it to not make sense to buy it. To understand this, we need to modify the ticket cost to see when the expected payoff is negative.

grand_prize, num_tickets, and chance_of_winning are loaded in the environment.

Set sims to 3000 and the lottery_ticket_cost variable to 0.
If the mean value of outcomes falls below 0, break out of the while loop.
Else, increment lottery_ticket_cost by 1.

Exercise

Calculating a break-even lottery price

Instructions