Re:The optimal amount of fraud is non-zero
by scott_w on Saturday September 03, 2022 @12:22PM
(#32703379)
Some of those aren’t analogous. Your Covid example: there’s also the cost _to others _ of you catching and spreading it, even if the risk to you is lower.
Speeding is another example: the cost (or risk) might be acceptable to you but not to the person you have an increased likelihood of hitting and doing serious injury to.
At a societal level, it holds, which is why we invest in measures to increase the cost of doing the wrong thing (speeding tickets, removing licenses).
- X is ipso facto bad. The optimal amount is zero.
- X is traded off against Y actually, so in general equilibrium with Y, it's nonzero.
And the above pair could be:
(Covid risk, attending fun parties)
(Risk of getting hit by a car, being able to walk anywhere)
(Discrimination in society, administrative costs of anti-discrimination laws).
The list goes on. It's a simple concept in decision theory, rehashed with an attractive title.