Insurance, or de facto mandatory gambling where the majority of the players don't know the rules
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Replying to @blue_traveler
@blue_traveler There's an important difference: gambling raises variance, insurance lowers variance.1 reply 0 retweets 2 likes -
Replying to @blue_traveler
@blue_traveler Rephrased: gambling creates risk, insurance reduces it. Insurance has to be a kind of canceling bet against an existing risk.1 reply 0 retweets 2 likes -
Replying to @St_Rev
@blue_traveler eg: Car insurance is a bet that pays off if and only if you wreck your car or have to pay a lawsuit. It cancels those risks.2 replies 0 retweets 3 likes -
Replying to @St_Rev
@St_Rev@blue_traveler Specifically insurance is a good trade when you can't afford the downside risk, but can afford premiums.2 replies 0 retweets 0 likes
Replying to @Alrenous
@Alrenous @blue_traveler insert handwaving about convex utility
11:34 AM - 31 Dec 2014
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. Banned in Sweden. SubGenius, Zhuangist, white-hat troll. Defrocked mathematician. Brain problems.