Re:Finally, Private Unemployment Insurance. But Will Anyone ...
by bhickey on Saturday May 28, 2016 @08:41AM
(#11791425)
> Assuming insurance companies are profitable, insurance is a -EV bet for the consumer.
This isn't sweepingly true. Consider:
* two actors who are trying to maximize the rate at which their wealth grows (expected utility)
* they have the same risk preferences
* one has more money than the other
then it follows that there may exist liabilities that the wealthier party is willing to buy from the poorer party. Insurance can unconditionally make all parties better off.
This isn't sweepingly true. Consider:
* two actors who are trying to maximize the rate at which their wealth grows (expected utility)
* they have the same risk preferences
* one has more money than the other
then it follows that there may exist liabilities that the wealthier party is willing to buy from the poorer party. Insurance can unconditionally make all parties better off.