= 27d567bc2d48d9f40e9ccc20ea370b15)
bogus comments on Buy Insurance -- Bet Against Yourself - Less Wrong
You are viewing a comment permalink. View the original post to see all comments and the full post content.
= 783df68a0f980790206b9ea87794c5b6)
Loading…= b715d02e85f7b3b4ae65ca3d3e450868)
Subscribe to RSS Feed
Powered by Reddit
= f037147d6e6c911a85753b9abdedda8d)
You are viewing a comment permalink. View the original post to see all comments and the full post content.
Comments (68)
Financially wasn't the missing nuance. In fact this works in principle even for causes of non-financial misery. But the feature that is needed is risk aversion. Or a non-linear utility to money relationship. Anything that makes you care more about a winning bet than a losing bet of the same amount. Caring (potential misery) is actually not directly relevant.
Don't forget about liquidity constraints.
For most people in the West, $10,000 is a negligible fraction of their lifetime wealth, so it is not rational to be anything other than risk-neutral about it. But User:Kevin needs his $5,800 as soon as the election ends, not over his lifetime. He may or may not be risk-averse, but he is definitely liquidity-constrained.
To the downvoter: If you don't believe that risk-neutrality is rational for relatively small sums of money, I've got some extended warranties to sell you. And if it was legal, I'd throw in some tickets for the local numbers bank as an alternative.