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agree, this is definitely describing something that is little talked about but very central to economics. there is a book by the Gangs of New York author calle
by doubloon 2y ago
agree, this is definitely describing something that is little talked about but very central to economics.
there is a book by the Gangs of New York author called Sucker's Progress: An Informal History of Gambling in America (1938). The relation between insurance and gambling used to be even more blurry. Even the terminology. The word "Policy" for example. https://en.wikipedia.org/wiki/Numbers_game https://en.wikipedia.org/wiki/Numbers_game
Even the mathematical foundations of insurance (probability) derived from the study of gambling. The famous Bayesian statistics are described by Bayes based on the concept of pebbles coming out of a bag.
i feel that we do not discuss economics / gambling / insurance in detail because it is emotionally difficult.
"well but the house always wins in gambling"
and in insurance? how often does the house lose?
- kortilla 2y ago> how often does the house lose? Not often, but it does. See AIG
- Yossarrian22 2y ago> and in insurance? how often does the house lose? That’s why the house has actuaries and analysts to tell them that their bets in Florida are too highly correlated to each other, and they have risk of bankruptcy. So they leave the state. Similarly, I imagine we’ll see tests of insurance companies’ risk analysis when California has a significant earthquake.