4 ms·

I don't get how your argument about time relates. You don't acquire the risk of injury, death or property damage at the same time you purchase insurance. In bot

by shkkmo 8y ago

I don't get how your argument about time relates. You don't acquire the risk of injury, death or property damage at the same time you purchase insurance. In both cases under discussion, there is existing risk that is mitigated by betting. > If you were doing both bets before the game started, at about the same time, then the second bet would effectively not be gambling. Not because of your motivation, exactly, but because it reduces the variance in how much money you'll have at the end of the game. I would agree that if you could make both bets simultaneously that would not be gambling, but I don't see how that is relevant In my example, both of the second bets reduce the variance in how much money you could gain or lose. 90,-10 after the second bet becomes 80,0 or 70,10 > Let's say you had a bet on team A forced upon you, because of where you live or something. At that point buying a matching bet on team B is an anti-gambling behavior that removes variance from the system. It's the equivalent of insurance. Why does the source of the risk matter? You have said that gambling is based not on intention, but on effect on outcome variance. Why would the second bet in your example be any different from the second bet in mine? Let's go with a more real world example. Let's say you have a shop near a stadium in the UK and you place bets so that you win money on outcomes that are likely to lead to vandalism or looting. My understanding of your position is that this is not gambling unless the shopkeeper miss-estimates his risk and bets so much that he gets vandalized and still comes out ahead. In my view, the distinction between gambling and insurance is purely marketing and public relations. I might buy a case that insurance companies don't gamble the same way that some bookies don't gamble, because they have the information they need to safely hedge their bets with certainty as they are made. In my view, consumers generally have much less information about the risks they are hedging, that means they can't have the certainty required for buying insurance to not be gambling

Dylan16807 8y ago
> Why would the second bet in your example be any different from the second bet in mine? If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance. (And if you were making that bet unconditionally then why did you wait until midgame?) It's tricky. I'd rather deal with simpler upfront scenarios. > Let's go with a more real world example. Let's say you have a shop near a stadium in the UK and you place bets so that you win money on outcomes that are likely to lead to vandalism or looting. My understanding of your position is that this is not gambling unless the shopkeeper miss-estimates his risk and bets so much that he gets vandalized and still comes out ahead. That could possibly work. If the looting is basically guaranteed, the bet acts to reduce variance. But looting tends to be pretty random, so under real life circumstances it probably wouldn't work out that way. The laws aren't set up for such tiny corner cases, of course. > I might buy a case that insurance companies don't gamble the same way that some bookies don't gamble, because they have the information they need to safely hedge their bets with certainty as they are made. > In my view, consumers generally have much less information about the risks they are hedging, that means they can't have the certainty required for buying insurance to not be gambling The information is needed to figure out a fair price for the insurance. If you don't have enough info you might overpay, but overpaying isn't gambling. If you turn a 10% risk of a $10k loss into a guaranteed $2.5k payment then you got ripped off but you didn't gamble. Your variance is still dropped to zero.
- shkkmo 8y ago
  > If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance. This doesn't make sense to me. What are "outside" factors and why do they matter? When you place the second bet, you have risk that you are reducing. Whether that risk has changed since you placed your first bet has no effect on whether your second bet reduces your risk or not. > I'd rather deal with simpler upfront scenarios. I'm sure you would, but you have failed to explain the relevance of upfront scenarios to our discussion. > If you don't have enough info you might overpay, but overpaying isn't gambling. You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are.
  - Dylan16807 8y ago
    Can we please not argue about when the bets happen? It's irrelevant to my main point. Pretend I didn't mention it. As long as the only things involved are the "team A wins" reward and the "team B wins" reward, any bet you make that brings them closer together is not gambling. > You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are. They're both not gambling. (Logistically. Legality is another issue.)

by shkkmo 8y ago

Dylan16807 8y ago

> Why would the second bet in your example be any different from the second bet in mine? If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance. (And if you were making that bet unconditionally then why did you wait until midgame?) It's tricky. I'd rather deal with simpler upfront scenarios. > Let's go with a more real world example. Let's say you have a shop near a stadium in the UK and you place bets so that you win money on outcomes that are likely to lead to vandalism or looting. My understanding of your position is that this is not gambling unless the shopkeeper miss-estimates his risk and bets so much that he gets vandalized and still comes out ahead. That could possibly work. If the looting is basically guaranteed, the bet acts to reduce variance. But looting tends to be pretty random, so under real life circumstances it probably wouldn't work out that way. The laws aren't set up for such tiny corner cases, of course. > I might buy a case that insurance companies don't gamble the same way that some bookies don't gamble, because they have the information they need to safely hedge their bets with certainty as they are made. > In my view, consumers generally have much less information about the risks they are hedging, that means they can't have the certainty required for buying insurance to not be gambling The information is needed to figure out a fair price for the insurance. If you don't have enough info you might overpay, but overpaying isn't gambling. If you turn a 10% risk of a $10k loss into a guaranteed $2.5k payment then you got ripped off but you didn't gamble. Your variance is still dropped to zero.

shkkmo 8y ago
> If you're conditionally making the second bet based on outside factors, then you might not actually be implementing a strategy of reduced variance. This doesn't make sense to me. What are "outside" factors and why do they matter? When you place the second bet, you have risk that you are reducing. Whether that risk has changed since you placed your first bet has no effect on whether your second bet reduces your risk or not. > I'd rather deal with simpler upfront scenarios. I'm sure you would, but you have failed to explain the relevance of upfront scenarios to our discussion. > If you don't have enough info you might overpay, but overpaying isn't gambling. You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are.
- Dylan16807 8y ago
  Can we please not argue about when the bets happen? It's irrelevant to my main point. Pretend I didn't mention it. As long as the only things involved are the "team A wins" reward and the "team B wins" reward, any bet you make that brings them closer together is not gambling. > You have still failed to explain WHY you think reducing risk by placing a bet that you will be injured is not gambling but placing other bets that reduce risk are. They're both not gambling. (Logistically. Legality is another issue.)