Final answer:
We overestimate lottery wins because of the availability heuristic which makes memorable events seem more common than they are, and confirmation bias, which focuses our attention on information that fits our beliefs.
Step-by-step explanation:
We tend to overestimate the frequency of lottery wins due to a cognitive bias known as the availability heuristic. This heuristic leads us to believe that events that are more easily remembered—such as the rare and heavily publicized lottery wins—are more common than they actually are. Such events are often reported in the media because they are unusual and exciting, causing them to be easily recalled when we think about lotteries. However, this does not reflect the true statistical probability of winning.
This bias can be further influenced by the related confirmation bias, where we pay attention to information that aligns with our beliefs—in this case, the dream of winning the lottery—and ignore information that contradicts it, such as the vast number of people who do not win.
Overall, understanding these cognitive biases and how they distort our perception of events like lottery winnings can help us have a more realistic understanding of probabilities and make better-informed decisions.