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Imagine losing all your data and thinking "dammit, I would give X of money to get my data back". Find X and decide for yourself.
by aw3c2 14y ago
Imagine losing all your data and thinking "dammit, I would give X of money to get my data back". Find X and decide for yourself.
- ComputerGuru 14y agoNot even remotely correct. I crash my 100k dollar car, and I think, damn, I'd give 100k to get it back. But when insuring it, I don't pay 100k for insurance! You have to take value x probability of loss to arrive at your X.
- cdjk 14y agoCorrected for your risk tolerance, of course. Suppose my data is worth $10k, and and there is a 1/100 chance of data loss (making those numbers up). I'd gladly pay $500 for "data loss insurance" (i.e. backups) to avoid the chance of data loss, even though $500 > (1/100)*$10k. Just multiplying by the probability is what's known as "risk neutral" - it works and is a very good approximation when the dollar amounts amounts are small compared to your net worth. It tends not to be a good approximation when the dollar amounts are higher. Of course, a realistic analysis would also account for the fact the the "data loss insurance" itself is probabilistic, but this is a start.