tag:blogger.com,1999:blog-16594468.post2970208404117835221..comments2023-10-24T04:29:23.693-06:00Comments on Atheist Ethicist: Climate Change: The One Percent RuleAlonzo Fyfehttp://www.blogger.com/profile/05687777216426347054noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-16594468.post-2064484801850927812009-12-20T23:32:39.366-07:002009-12-20T23:32:39.366-07:00Actually it's probably better to make the 1% t...Actually it's probably better to make the 1% the negative outcome.<br /><br />It would be stupid to fold every poker hand that wasn't a sure winner (or at least better than 99% probable of winning). <br /><br />That's what one would do if he applied the 1% Rule in poker (treat a 1% chance of losing as if it were certain to lose).Joe The Jugglerhttps://www.blogger.com/profile/08623445472297705053noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-56680257924901737292009-12-20T23:25:48.273-07:002009-12-20T23:25:48.273-07:00I think a slightly better analogy than insurance i...I think a slightly better analogy than insurance is gambling. If you have a 1% chance of winning a bet, it is utterly foolish and absurd to treat it as if you are certain to win.<br /><br />If you were certain to win, you'd bet as much as you could. Since you're actually 99% certain to lose, it would be more prudent to make a very small bet or pass up the chance to bet altogether unless there were a payoff commensurate with the high risk of losing (like a 100 to 1 payoff on such a bet).Joe The Jugglerhttps://www.blogger.com/profile/08623445472297705053noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-14650234295970711312009-12-18T14:30:50.589-07:002009-12-18T14:30:50.589-07:00I was talking about insurance from the point of vi...I was talking about insurance from the point of view of the purchaser, not the insurance industry;<br /><br />My point was, acting on global warming is like BUYING insurance, not selling it.<br /><br />The argument against acting on a even a low probability event with large consequences is an argument against anyone ever purchasing insurance. You argument would seem to suggest such an act is irrational.<br /><br />So why do they do it?Efriquehttps://www.blogger.com/profile/08526031804261484547noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-58267713408760552392009-12-18T05:03:24.288-07:002009-12-18T05:03:24.288-07:00Efrique
Insurance involves the selling of risk.
...<b>Efrique</b><br /><br />Insurance involves the selling of risk.<br /><br />An individual might prefer a guaranteed $11,000 loss to a 10% chance of a $100,000 loss because he is averse to risk, or, because the guaranteed loss is guaranteed, it is easier to plan for and around.<br /><br />This is true in the same way that an investor might prefer to lend his brother $10,000 at 5% to buying a CD from a bank at 6% - because the value of helping somebody in the family is worth the cost of 1% interest.<br /><br />(Eneasz: The insurance company does make money from investing, but the person paying the insurance premium had the option of investing as well. The foregone return on investment is part of the cost of insurance.)<br /><br />There is always the possibility of other values complicating these types of considerations.<br /><br />However, insurance companies make their money by averaging out the risk of a large number of policy holders. Each of 1000 people pay their $11,000 in insurance, and the company pays the 10 claims that actually come in.<br /><br />Nobody is in a position to buy the risk of global catastrophe. There is no super-race collecting the premiums from 1000 planetary civilizations with the promise that it will repair the planet where disaster actually strikes.<br /><br />In this case, the government is better off paying the $25 billion for the catastrophe that happens (or the cost of preventing it if less than $25 billion), then spending $30 billion on insurance.Alonzo Fyfehttps://www.blogger.com/profile/05687777216426347054noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-39915515420276726782009-12-17T23:09:55.719-07:002009-12-17T23:09:55.719-07:00Efrique -
Admittedly, I don't know a lot abou...Efrique -<br /><br />Admittedly, I don't know a lot about the insurance industry. However it is my understanding that they make their profit by investing the money they receive and paying out claims from the profits of those investments, thus earning money even while paying out (on average) slightly more than what it costs one to buy the insurance. If I understand correctly.Eneaszhttps://www.blogger.com/profile/14500232958398471146noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-6035839660880123252009-12-17T16:56:07.557-07:002009-12-17T16:56:07.557-07:00While I agree with the proposition that "we s...While I agree with the proposition that "we should treat a 1% chance as certainty" is wrong, the outcome of your analysis depends heavily on the two sets of costs you assign. <br /><br />So the questions that should be asked are "What are the two sets of costs, as best as we can figure?" and "What percentage chance should be enough to get us to regard acting as more prudent"<br /><br />It seems that by the reasoning used in your argument, nobody should ever buy insurance, because it costs more than the expected cost (in present value terms) of the event you're insuring against (it has to, or insurers would all go broke). <br /><br />Is insurance irrational? <br /><br />So, anyway, while I agree that the 1% doctrine is wrong, I think there's a point at which the relative costs and relative probabilities do need to be weighed up, and the higher relative cost of not acting means that rationally one should act when the probability goes above some fairly modest figure.Efriquehttps://www.blogger.com/profile/08526031804261484547noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-54529947144130341342009-12-17T08:55:09.944-07:002009-12-17T08:55:09.944-07:00Can I get a mulligan for the last couple of my com...Can I get a mulligan for the last couple of my comments?<br /><br />I <b>assumed</b>, incorrectly, that you were advocating for us to immediately set ourselves on a course of ceasing use of fossil fuels, without clear enough evidence, no matter the cost.<br /><br />*facepalm*Rexhttps://www.blogger.com/profile/14234383655803897848noreply@blogger.comtag:blogger.com,1999:blog-16594468.post-36899141113055381702009-12-17T07:39:13.543-07:002009-12-17T07:39:13.543-07:00re: your comments on "Climate change: the One...re: your comments on "Climate change: the One Percent Rule"<br /><br />As they say in tennis, Alonzo . . . "point, set and match!"<br /><br />Tennis anyone?<br />.antonhttps://www.blogger.com/profile/02909850387414677663noreply@blogger.com