What do you mean practically by: "the cost of insurance approaches infinity due to infinite uncertainty"?
In the same way the risk premium of a financial security is proportional to its riskiness.
> operating costs (cost of living + insurance costs). That is supposed to be where the prices come from
That isn’t the only way to set price.
Common methods are:
- Value-Based Pricing
- Cost-Plus Pricing (your example)
- Competitive Pricing
- Psychological Pricing
- Dynamic Pricing
- Bundle Pricing
- Promotional Pricing
It doesn't. Its supposed to come from your operating costs (cost of living + insurance costs). That is supposed to be where the prices come from, the problem is the insurance...if the cost of insurance approaches infinity due to infinite uncertainty, then "dark patterns" become "coping mechanisms". Not that I'm saying airline booking websites are in the moral right here, or anything - but someone thought they needed a raise, or to provide stock holders with a quarterly increase, because of rising cost(s) (or greed, but that's just another way insurance costs increase).