<div dir="ltr">At 10:59 p.m. ET on Wednesday, Powerball announced the winning number combination for the biggest jackpot in lottery history. By early Thursday morning, the New York Times reported that at least three states sold a jackpot-winning ticket. The winners will divide a jackpot worth $1.568 billion, with a cash option of $983.5 million.</div>
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I think what is interesting about this recent Powerball frenzy is that it shows something very deep about our inability to grasp large numbers. I find it a bit of a head scratcher that after 14 drawings without a winner, there was barely a ripple of news about the $255 million jackpot on December 26, despite the fact that previous jackpots of that size drew large crowds and huge media attention. I personally didn’t even hear about what was going on with Powerball until it reached the $900 million mark. Clearly, we're all crazy about the idea of winning a jackpot of nearly $1.6 billion. But why is it that jackpots that used to get us all in a frenzy no longer do despite the fact that even a $40 million prize is life changing for almost anyone who plays the lottery?This is not surprising from the standpoint of human evolution. From an evolutionary standpoint, understanding large numbers has not been a survival-essential skill. Primitive man had no need to ponder infinity, or even numbers in the hundreds. Modern man’s ability to generate big numbers has far outstripped our ability to comprehend them and I suspect that we can’t truly grasp the difference between $40 million or $255 million or $1.6 billion, for that matter.In fact, without language and numbers, we appear unable to understand exact amounts beyond three. Elizabet Spaepen of the University of Chicago, explained in an NPR story about a group in Nicaragua born deaf that never learned Spanish or formal sign language. "Up to three, they're fine. But past three, they start to fall apart." In an io9 Gizmodo story, Spencer Greenberg, cofounder of an AI-powered hedge fund and founder of ClearerThinking.org, brought up the example of the Piraha language, the dialect of an indigenous hunter-gatherer tribe from the Amazon. The language doesn't have numbers, just concepts for a small amount and a larger amount. They do just fine. In general, Greenberg says "we can easily visualize five things." Maybe we can roughly visualize slightly larger amounts but imagining a million or 100 million or one billion is useless.During the Nineties, when the multistate lottery first passed the $100-million milestone, people stood outside gas stations and convenience stores all night to buy tickets. My friend Michael distinctly remembers watching a TV news reporter asking a guy in line what he would do with the money if he won. He said, "travel and probably pay down some credit cards." Apparently, humans have such an inability to grasp what large numbers really are that this poor soul couldn’t wrap his head around $100 million being enough for him to commit to paying off the entire balances.

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The minimum Powerball jackpot is now $40 million, which likely just goes into the Piraha category of larger amount, the same category in which we would place $100 million or $500 million. Media outlets mention the winning numbers after every drawing because players check them; otherwise, $40 million, a life changing amount, barely qualifies as news. The $1.6 billion jackpot is 40 times larger but are we so jaded that we would only be 1/40th as happy with the "minimum" jackpot? I don’t think so. I think it is all just “a lot of money.” We need the benchmark of “the most ever” to get excited because if we aren’t capable of understanding the absolute value of numbers so large then we will assess the value of the jackpot relative to other lottery jackpots we have heard about. We understand the concept of more and less because we are good at relative pricing.

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Dan Ariely gives an overview of relative pricing in his best seller Predictably Irrational: "Humans rarely choose things in absolute terms. We don't have an internal value meter that tells us how much things are worth. Rather, we focus on the relative advantage of one thing over another, and estimate value accordingly." This is certainly exacerbated when the numbers we are dealing with are incomprehensible in the first place.

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When $100 million was the biggest jackpot, people generally knew that was gigantic simply because it was the biggest, or because it was bigger than usual. It had nothing to do with what $100 million was worth or what it could buy. The guy in the old TV news story represented just about everybody: he knew $100 million was big relative to other jackpots, but could not register it relative to his own credit card balances. And now, with the jackpots so much bigger, $100 million isn't even considered a big deal.

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The Powerball officials may have actually recognized people were getting blasé about nine-figure jackpots. Last October, they changed the jackpot drawing odds from 175-million-to-1 to 292-million-to-1, increasing the likelihood of carry-overs. Walt Hickey of FiveThirtyEight.com has been studying this since the change was proposed. "Lottery turnouts are based on excitement and coverage. Powerball used to be able to get on the news with a $400 million jackpot. There's a possibility their own success could hurt them moving forward: The folks behind Powerball should be worried that news organizations won't bite until they see nine zeroes."

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Unless Powerball can wipe from our collective memory the last few decades of eight- and nine-figure jackpots, they are stuck with a world of relative pricers. One of these days, a billion dollars won't be enough to get us off the couch.

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