Another common case where you get positive EV insurance is when the cost paid by you and the cost paid by the insurerer, when the bad event happens, are significantly different.
For example, if you get extended phone / device insurance from a manufacturer, when the device fails you would have to pay the retail price for a new device. The manufacturer however only needs to pay the production price, which given margins can be a small fraction of the retail price. Thus the manufacturer can set a premium that is (in expectation) somewhere in between those two prices, and you both benefit.
I don't think your case for how insurance companies make money (Appendix B) makes sense. The insurance company does not have logarithmic discounting on wealth, it will not be using Kelly to allocate bets. From the perspective of the company, it is purely dependent on the direct profitability of the bet - premium minus expected payout and overheads.
Separately, the claim that there is no alternative to Kelly is very weak. I guess you mean there is no formalized, mathematical alternative? Otherwise, I propose a very simple one: buy insurance if the cost of insurance is lower than the disutility of worrying about the bad outcomes covered by insurance. This is the 'vibes based' strategy you discuss at the beginning, but it is clearly superior to the Kelly calculator. In the case where Kelly says not to buy insurance, either:
Therefore the Kelly criterion can only be superior when it advises you to buy insurance for something you are not worried about. However, you are not likely to run this calculations about things you aren't worried about, so these opportunities are hard to find.
Nevertheless, I'm glad the tool exists, because it might help me calibrate how much I should be worried about outcomes I can quantify.
Yes, this post was very useful as advice to reverse to me. I think it possible now that one of the biggest problems with how I'm living my life today is optimising too hard for slack.
Low-confidence comment disclaimer; while I've had the concept pretty much nailed down before, I never before thought about it as something you might have too much off. After reading this post I realised that some people do not have enough slack in their life, implying you can choose to have less or more slack, implying it's possible too have too much slack.
I don't have abstract 'this is what too much slack looks like' clearly defined right now, but one thing resonates from my own experience. I often find myself with free time, and 'waste it away'. I don't really do anything on most weekends. Having more constraints as guidance for behaviour in free time could likely remediate that; but I seem to be very good at talking myself out of any recurrent commitments, saying that they would reduce my freedom/flexibility/slack.
At the same time, it seems to me that I'm happiest, most 'alive', most in the 'flow', in situations with exactly the kind of binding constraints this post talks of avoiding. The constraints focus you on the present, on the very moment, on being. For me this is clearest in sailing regattas - a clear purpose that acts as a binding constraint (to go as fast as possible while staying safe - a safety margin does not for slack make, since you are not willing to ignore crossing it), consuming all your attention (at least during the time you're responsible for the ship, and often more).
I suppose one can stretch the metaphor and say that having no slack on too many dimensions is likely to squash you; but having slack everywhere leaves you floating around aimlessly. Keeping most constraints slack and choosing only a couple aligned ones to bind against is possibly a way to find purpose.
The initial argument that convinced you to not eat meat seems very strange to me:
Her: why won’t u eat rabbits? Me: because i had them as pets. i know them too well. they’re like people to me.
This reads to me as: I don't think eating rabbits is immoral, but I have an aesthetic aversion to them because of emotional attachment, rather than moral consideration. Is that not the right reading?
Her: i will get you a pet chicken Me: … Me: omg i’m a vegetarian now :-/
So, you've now built extended your emotional attachment towards rabbits to all animals? Or just the possibly-pettable-ones? But firstly, why do you think that's a good thing?
I guess as an instrumental tactic for "I want to become a vegetarian but can't seem to stick to it", 'imagine your favourite pet, but they're ' might work. But it's surprising that without that initial impetus this worked.
FWIW (a year later) I read the statistic the same way you initially did, but didn't do the comparison. Sorry! Thanks for doing the maths below and in the edit.
What's the vulnerable state you're refering to here? Staying on site?