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What makes gambling wrong but insurance right? (2017)

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Re: What makes gambling wrong but insurance right? (2017)

#291

Post by mcculley »

scott_w wrote: post #289
mcculley wrote: post #284

Earlier quoted context omitted.

I would very much like to move to live amongst the people that are simply not that stupid.

Now I don’t know if you’re just deliberately misreading my comments. At no point do I say “people don’t engage in dangerous behaviour,” I merely point out such behaviour is UNRELATED to the cost of healthcare. You’ve yet to show me any data that shows a link between affordable healthcare and moral hazard. On the contrary, your only examples come from within a system famed for being the opposite.

I never claimed that there is a link between affordable healthcare and moral hazard. I argued only with two of your assertions which I have found to be unfortunately untrue, in my experience with the U.S. healthcare industry.

Re: What makes gambling wrong but insurance right? (2017)

#292

Post by GeorgeDewar »

LorenPechtel wrote: post #279
raincole wrote: post #207

Earlier quoted context omitted.

If you have 10% chance to lose -$91 and 90% chance to get +$10, the expected value in money is -$0.1. It sounds bad. But the relationship between utility and money isn't linear. If for you, $10 is worth 10u and $91 is worth only 89u, this deal has expected value of +0.1u. Why and how isn't it linear? It's a hard problem that can't be answered easily. However we know it's true for most big institutions in stock and bo…

In the real world it always goes the other way--the next dollar is never worth as much as the previous dollar, thus any fair bet costs more (the previous dollar) than it gains (the next dollar.) That's why you should only engage in negative bets, aka insurance. There you are trading a next dollar (worth less) for a previous dollar (worth more).

This has really made insurance click for me because while I understand it intuitively, I wanted a more scientific foundation to understand its value.

I think a great illustration is an extreme case. If I have a house and just enough income to cover all my needs and wants (including retirement savings), then depending on my attitude an extra $1000 per year might have no effect at all - I have nothing I want to spend it on and nothing to save for.

But losing my home would still be devastating. So the utility value of the $1000 per year for the rest of my life is low or none, but the utility value of the previously earned money I would lose from losing my house is high.

Re: What makes gambling wrong but insurance right? (2017)

#293

Post by scott_w »

mcculley wrote: post #291
scott_w wrote: post #289

Earlier quoted context omitted.

Now I don’t know if you’re just deliberately misreading my comments. At no point do I say “people don’t engage in dangerous behaviour,” I merely point out such behaviour is UNRELATED to the cost of healthcare. You’ve yet to show me any data that shows a link between affordable healthcare and moral hazard. On the contrary, your only examples come from within a system famed for being the opposite.

I never claimed that there is a link between affordable healthcare and moral hazard. I argued only with two of your assertions which I have found to be unfortunately untrue, in my experience with the U.S. healthcare industry.

> I was similarly convinced that moral hazard in healthcare was not a problem because consumers don't get more healthcare than they need. I know now that this is not the case.

Except for… you know, right here.

Re: What makes gambling wrong but insurance right? (2017)

#294

Post by mcculley »

scott_w wrote: post #293
mcculley wrote: post #291

Earlier quoted context omitted.

I never claimed that there is a link between affordable healthcare and moral hazard. I argued only with two of your assertions which I have found to be unfortunately untrue, in my experience with the U.S. healthcare industry.

> I was similarly convinced that moral hazard in healthcare was not a problem because consumers don't get more healthcare than they need. I know now that this is not the case. Except for… you know, right here.

I did not claim that the moral hazard problem is linked to affordability. You seem to want to argue with things I have not said.

Re: What makes gambling wrong but insurance right? (2017)

#295

Post by scott_w »

mcculley wrote: post #294
scott_w wrote: post #293

Earlier quoted context omitted.

> I was similarly convinced that moral hazard in healthcare was not a problem because consumers don't get more healthcare than they need. I know now that this is not the case. Except for… you know, right here.

I did not claim that the moral hazard problem is linked to affordability. You seem to want to argue with things I have not said.

That’s the “moral hazard” in healthcare that’s used against affordable healthcare. It’s the only context it’s used in.

Obesity and opioid addiction aren’t “moral hazards” in healthcare, they’re literally things healthcare and society need to deal with. We’re far off the topic of insurance and I don’t even understand what you took issue with apart from nitpicking a sentence at this point.

Re: What makes gambling wrong but insurance right? (2017)

#296

Post by AbstractH24 »

kgwgk wrote: post #287
AbstractH24 wrote: post #283

There's nothing wrong with gambling as long as you are aware of the odds and make intelligent decisions based on them. Same with insurance. Where both insurance and gambling go wrong is when people try to appeal to your emotions rather than logic.

> There's nothing wrong with gambling as long as you are aware of the odds and make intelligent decisions based on them. Essentially if you’re aware of the odds and make intelligent decisions based on them there is no_____ _____ ____ gambling.

I have no idea what the ____ _____ ____ is supposed to be, but I'm guessing it is a string of negative words.

And yes, thats the case. Everything in life is playing the odds.

Re: What makes gambling wrong but insurance right? (2017)

#297

Post by mcculley »

scott_w wrote: post #295
mcculley wrote: post #294

Earlier quoted context omitted.

I did not claim that the moral hazard problem is linked to affordability. You seem to want to argue with things I have not said.

That’s the “moral hazard” in healthcare that’s used against affordable healthcare. It’s the only context it’s used in. Obesity and opioid addiction aren’t “moral hazards” in healthcare, they’re literally things healthcare and society need to deal with. We’re far off the topic of insurance and I don’t even understand what you took issue with apart from nitpicking a sentence at this point.

Your assumption about context is not relevant to my argument.

Re: What makes gambling wrong but insurance right? (2017)

#298

Post by scott_w »

mcculley wrote: post #297
scott_w wrote: post #295

Earlier quoted context omitted.

That’s the “moral hazard” in healthcare that’s used against affordable healthcare. It’s the only context it’s used in. Obesity and opioid addiction aren’t “moral hazards” in healthcare, they’re literally things healthcare and society need to deal with. We’re far off the topic of insurance and I don’t even understand what you took issue with apart from nitpicking a sentence at this point.

Your assumption about context is not relevant to my argument.

You’re right, it was my mistake for assuming words mean what they’re commonly used to refer to /s

Re: What makes gambling wrong but insurance right? (2017)

#299

Post by mcculley »

scott_w wrote: post #298
mcculley wrote: post #297

Earlier quoted context omitted.

Your assumption about context is not relevant to my argument.

You’re right, it was my mistake for assuming words mean what they’re commonly used to refer to /s

Moral hazard has a well understood meaning outside of affordability. I would very much like to see the system in the U.S. make more sense. Any time spent in an emergency room or waiting room in the U.S. makes the moral hazard obvious.

Re: What makes gambling wrong but insurance right? (2017)

#300

Post by EVa5I7bHFq9mnYK »

bluecalm wrote: post #168

I feel the article as well as most of the comments miss the most important difference between the two. Insurance, assuming the fee isn't too high, increases your utility of money while gambling decrease it. If there is an event that happens 1 time in 100 that costs you $100k and you pay $1.05k to insure against that would have a negative expected value in money terms but positive expected value in utility of money te…

Gambling can be a completely rational thing to do. If you are old, poor and tired, your odds to become a millionaire from work are exactly zero. But if you buy a lottery ticket, you buy yourself a week of hope, adrenaline, and a non-zero chance for a life of your dreams.
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