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DSimon comments on Buy Insurance -- Bet Against Yourself - Less Wrong
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Comments (68)
According to the post: "the best-informed actors in the market will make their money from the least-informed actors". If you bet without paying any attention to the most likely outcome, you are more likely to be among the least-informed actors - and so will lose money on top of the transaction charges for playing.
Insurance doesn't appeal to everyone. Many of my countrymen regularly play the National Lottery - increasing their risk-taking, not minimising it. Basically, insurance people always take their cut - which makes insurers poorer, on average. Minimising your risks is an especially poor strategy for males.
This post is trying to sell readers on insurance. However, I don't want insurance, thank you!
Minimizing risk can be a good idea whenever you have a threshold of risk past which you'd have a very hard time returning (i.e. severe illness or poverty).
Of course there are circumstances when insurance makes sense. What the post says, though is:
There is no mention of considering whether you might want to take more or fewer risks. This idea that risks are bad and that people should insure against them is not a biologically realistic one. The council given in this post needs to be taken with multiple pinches of salt.