4 ms·

> So how is that different from hedging your bets? Correct me if I’m wrong, but I think the difference is, no one is betting that you actually do have an unfor

by tkxxx7 8y ago

> So how is that different from hedging your bets? Correct me if I’m wrong, but I think the difference is, no one is betting that you actually do have an unforeseen incident, so there is no bet to hedge against.

shkkmo 8y ago
> I think the difference is, no one is betting that you actually do have an unforeseen incident, You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance. The fact that you are doing so to offset some financial risk doesn't change the fact that you are gambling. I don't see why source of a risk matters here. I believe the position I am arguing against is that that motivation of hedging against risk makes gambling-like behavior not gambling. As far as I can tell your position is: Gambling-like behavior is not gambling if it is done to offset non-gambling related risk.
- tkxxx7 8y ago
  > You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance. Almost, but I don't feel like this is 100% accurate, because neither involved party wants an unforeseen incident to occur - the 'win' situation, if you could call it that, is the same for both parties. I can sort of see the argument that you are betting you "won't win", but I can't see it as gambling behavior: > I don't see why source of a risk matters here. Gambling implies taking a risk for possible gain, no? To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions. Contrast this to, say, a slot machine, where the 'win' conditions are owned by the house and unbeknownst to you. There is no situation where you can know you will be paid out for any given parameters. What about flight insurance? Is that a gamble because no one knows if you'll make your flight? Are you betting that you won't make your flight because you purchased it, or are you paying for a conditional service? (mostly not serious) aside: if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction?
  - shkkmo 8y ago
    > To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions. It is? I'm pretty sure health care pricing is far more opaque than slot machine payout amounts (the opaqueness of payout rates varies by state). You have increased the downside of not having large hospital bills. You are taking on risk, but the idea is that the small risk reduces the variance in your outcomes. See the other reply thread where I am trying to understand why reducing variance in one situation is gambling but doing it in another is not. > if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction? I would say akin, but obviously not the same. In both cases you have made wager that you can be usually pretty certain has a negative expected value and the motivation for this wager is to acquire a positive/pleasant state of mind.
drusepth 8y ago
If you weren't betting that you would have an unforeseen incident (rephrased as: if you were betting you wouldn't have an unforeseen incident), why would you pay anything? Paying $X is saying "I bet something will happen to me, so I need this service so I don't get screwed over." Otherwise, why buy pay anything at all?

by tkxxx7 8y ago

shkkmo 8y ago

> I think the difference is, no one is betting that you actually do have an unforeseen incident, You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance. The fact that you are doing so to offset some financial risk doesn't change the fact that you are gambling. I don't see why source of a risk matters here. I believe the position I am arguing against is that that motivation of hedging against risk makes gambling-like behavior not gambling. As far as I can tell your position is: Gambling-like behavior is not gambling if it is done to offset non-gambling related risk.

tkxxx7 8y ago
> You are. When you buy insurance, you are betting that you will have an unforeseen incident and will utilize your insurance. Almost, but I don't feel like this is 100% accurate, because neither involved party wants an unforeseen incident to occur - the 'win' situation, if you could call it that, is the same for both parties. I can sort of see the argument that you are betting you "won't win", but I can't see it as gambling behavior: > I don't see why source of a risk matters here. Gambling implies taking a risk for possible gain, no? To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions. Contrast this to, say, a slot machine, where the 'win' conditions are owned by the house and unbeknownst to you. There is no situation where you can know you will be paid out for any given parameters. What about flight insurance? Is that a gamble because no one knows if you'll make your flight? Are you betting that you won't make your flight because you purchased it, or are you paying for a conditional service? (mostly not serious) aside: if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction?
- shkkmo 8y ago
  > To me, part of the difference is that the risk/chance involved (life) is not intrinsic to the transaction - it is more or less known what your returns will be, and under what conditions. It is? I'm pretty sure health care pricing is far more opaque than slot machine payout amounts (the opaqueness of payout rates varies by state). You have increased the downside of not having large hospital bills. You are taking on risk, but the idea is that the small risk reduces the variance in your outcomes. See the other reply thread where I am trying to understand why reducing variance in one situation is gambling but doing it in another is not. > if what you posit is true, is the peace of mind one gains from having insurance akin to gambling addiction? I would say akin, but obviously not the same. In both cases you have made wager that you can be usually pretty certain has a negative expected value and the motivation for this wager is to acquire a positive/pleasant state of mind.

drusepth 8y ago

If you weren't betting that you would have an unforeseen incident (rephrased as: if you were betting you wouldn't have an unforeseen incident), why would you pay anything? Paying $X is saying "I bet something will happen to me, so I need this service so I don't get screwed over." Otherwise, why buy pay anything at all?