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Good points. Both are actually, in some sense, the same thing. Both are costs which you will pay instead of your insurance company. Because they don't pay thos

Good points. Both are actually, in some sense, the same thing. Both are costs which you will pay instead of your insurance company. Because they don't pay those costs, their assesments of the costs of a fire will be off. Thus they will let some houses burn which optimally, would not burn. However, my underlying point was really that it does make rational sense to allow some houses to burn. We could put a fireman on every street, and we'd probably save a lot of houses, lives, and heirlooms. But that would prohibitively expensive. Instead, we have to engage in trade-offs, having cheaper fire protection at the cost of risking some houses, lives, and heirlooms.

jsprogrammer 10y ago
Firemen get trucks with sirens and lights. There is no need to locate one on every street. Where are you getting your definition of rational? Are you saying you can assign a fair, total ordering of value to every thing?
- winstonewert 10y ago
  > Firemen get trucks with sirens and lights. There is no need to locate one on every street. But we'd still save more lives, houses, and heirlooms if we did put one on every street. Every additional kilometer between my house and the fire station increases the level of risk for my house. My point is: it's not binary: you have fire protection or you don't. You have varying degrees of fire protection quality with varying degrees of cost and you have pick the one you want. > Where are you getting your definition of rational? Are you saying you can assign a fair, total ordering of value to every thing? No, I certainly hold to the subjective theory of value which rejects the idea that there is an objective fair total ordering of value. By rational, I mean its a decision that makes sense given your subjective valuation. You aren't going to reduce the risk as much as possible because that would be far too expensive. You are going to choose a level of risk that in your estimation trades off expensive and risk in an acceptable manner. That's subjective, and will vary from person to person, but no matter what your decision is, you will end up having some risk that you could have gotten rid of it, if you were willing to pay for it.

jsprogrammer 10y ago

Firemen get trucks with sirens and lights. There is no need to locate one on every street. Where are you getting your definition of rational? Are you saying you can assign a fair, total ordering of value to every thing?

winstonewert 10y ago
> Firemen get trucks with sirens and lights. There is no need to locate one on every street. But we'd still save more lives, houses, and heirlooms if we did put one on every street. Every additional kilometer between my house and the fire station increases the level of risk for my house. My point is: it's not binary: you have fire protection or you don't. You have varying degrees of fire protection quality with varying degrees of cost and you have pick the one you want. > Where are you getting your definition of rational? Are you saying you can assign a fair, total ordering of value to every thing? No, I certainly hold to the subjective theory of value which rejects the idea that there is an objective fair total ordering of value. By rational, I mean its a decision that makes sense given your subjective valuation. You aren't going to reduce the risk as much as possible because that would be far too expensive. You are going to choose a level of risk that in your estimation trades off expensive and risk in an acceptable manner. That's subjective, and will vary from person to person, but no matter what your decision is, you will end up having some risk that you could have gotten rid of it, if you were willing to pay for it.