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Insurance is the opposite of a lottery. If you think buying lottery tickets are a waste of money because you lose out in the long run, the same argument should lead you to think having insurance is a good thing.
If insurance was cost effective in the long run, insurance companies wouldn't be profitable
Insurance is the opposite of a lottery. If you think buying lottery tickets are a waste of money because you lose out in the long run, the same argument should lead you to think having insurance is a good thing.
I think you have it backwards - insurance and lottery are (sort of) equal. In the long term, you'll lose money in the lottery. You'll also lose money paying for insurance. If you have extraordinary "good luck", you may come out ahead in the lottery. And if you have extraordinary "bad luck" you may come out ahead in insurance. Insurance of course has a more practical value, and a much better return on investment (even…
the decision of purchasing insurance or not depends more on how many resources or alternatives you have, and if you can easily smooth over an uninsured bad event so that it doesn't wipe you out. for individuals with limited resources who will be wiped out if uninsured, it is very rational to buy insurance, including paying a profit margin to the insurer on top.
another way of thinking about insurance is a way for groups of people to pool and share risk -- if they don't get hit by correlated bad luck then they all get to smooth out their bad outcomes.
Insurance is the opposite of a lottery. If you think buying lottery tickets are a waste of money because you lose out in the long run, the same argument should lead you to think having insurance is a good thing.
If the loss from not having insurance is bearable, you're better off not buying the insurance. If it's not, it's worth the money even if you'd lose out on average. That's why phone or car insurance (collision and comprehensive) is a waste of money for the average person, but health or homeowners insurance isn't.
I've found "efficiency as the opposite of stability" a very powerful concept to think about - even though it's fairly simple, it seems to be almost a fundamental law. Whether it's about the economy at large, your own household, a supply chain, what have you - as soon as you optimize for efficiency by removing friction, you take all the slack/damping out of the system and become instantly more liable to catastrophic f…
Maybe the problem is that efficiency and robustness are orthogonal?
Insurance is the opposite of a lottery. If you think buying lottery tickets are a waste of money because you lose out in the long run, the same argument should lead you to think having insurance is a good thing.
Insurance protects you from low-probability downsides you can't afford. Lottery tickets are about buying into low-probability upsides. If the loss from not having insurance is bearable, you're better off not buying the insurance. If it's not, it's worth the money even if you'd lose out on average. That's why phone or car insurance (collision and comprehensive) is a waste of money for the average person, but health or…
Oh, yeah, and then there's legal requirements that you have car insurance. So no, I don't buy the idea that car insurance is a waste of money.
Phone insurance? There I agree with you.
One makes a tradeoff by reducing overheads and buffers, and the other doesn't have any tradeoffs, it's just a better way of doing things based on novel techniques.
the article doesn't make sense to me when making decisions: "we should be asking which option will give us good-enough results under the widest range of future states of the world" doesn't that lead you right back to the struggle for the most efficient way to determine the optimal "good-enough" answer? Also, the article talks about efficiency but efficiency of what exactly? What if you're very efficient at a maintain…
* "Upgrade Attack" is more efficient. It allows you to beat the game faster. But since your HP is low, you can't afford to make mistakes (get hit).
* "Upgrade HP" is more robust. It increases your damage-buffer, which allows you to absorb more mistakes without dying. But if you make zero mistakes, you won't beat the game as quickly as if you'd upgraded Attack.
IRL the dichotomy is often "income vs wealth", "velocity vs displacement", "throughput vs latency", "strength vs endurance", etc.
There’s a big difference between being productive and being busy.
Insurance is the opposite of a lottery. If you think buying lottery tickets are a waste of money because you lose out in the long run, the same argument should lead you to think having insurance is a good thing.
I think you have it backwards - insurance and lottery are (sort of) equal. In the long term, you'll lose money in the lottery. You'll also lose money paying for insurance. If you have extraordinary "good luck", you may come out ahead in the lottery. And if you have extraordinary "bad luck" you may come out ahead in insurance. Insurance of course has a more practical value, and a much better return on investment (even…
Only if you put zero value on the peace of mind that comes with having insurance against risks that, if they happened, would bankrupt you. But if you put zero value on that, you wouldn't buy insurance.