First off thats just reinforcing the grayness of the difference. Where exactly on which exact bell curve does gambling stop and insurance start?
Second, the one thats even more ambiguous is insurance from the perspective of the insurer. It's just gambling with a payment plan, that HOPEFULLY doesn't turn into a ponzi scheme.
> Where exactly on which exact bell curve does gambling stop and insurance start?
That's not the difference. The difference is that in gambling, you accept a large variance in payoff, whereas in insurance, you don't; you transfer that risk to someone else.
In gambling you pay someone to take risk for you. In insurance you pay someone to take risk for you. They are the same tool; we just give it a different name when we’re hedging from when we’re speculating.
> In gambling you pay someone to take risk for you.
No, you don't, you take the risk yourself. You're certainly not paying the casino to take risks for you; you're paying them for the privilege of you taking risks (and losing on average) by playing their games.
I think they are on different sides of 50% probability. Insurance helps mitigate a low-probability risk. Gambling provides a low-probability chance of a big reward.
Socially the presence of a small number of really destitute people is a problem, so we moralize the process to prevent it as “bad.” The presence of a small number of really rich people is, like, neutral or negative, so we don’t moralize the a thing they produces them as good.
It is a bit weird that we don’t moralize the rich as good in this case, given that we often do do that. Not sure what’s up there. Maybe gambling is uncomfortable because produces rich that aren’t seen as deserving somehow.
> I think they are on different sides of 50% probability. Insurance helps mitigate a low-probability risk. Gambling provides a low-probability chance of a big reward.
Trivially not true- I can wager on a heavy favorite to win at very low payouts
>Where exactly on which exact bell curve does gambling stop and insurance start?
I don't think it has to come from me that the world isn't black and white.
>It's just gambling with a payment plan
If it's all so gray, why couldn't you say "gambling is just a riskier insurance" then? You only consider one of the two possible directions, namely the one that puts insurance under a bad light.
The only confusion comes from people who bend over backwards to convince themselves they aren’t gambling because of weird “it’s a sin” morals that leak into their mind.
Betting against a company by shorting has no different moral component than betting on a company by investing. Either way you aren’t doing work and are taking risk to get a higher return.
Insurance products have different risk curves but they are still gambling. Someone can buy a ton of garbage houses, buy bunch of insurance, and just hope they burn down for the payout.
Second, the one thats even more ambiguous is insurance from the perspective of the insurer. It's just gambling with a payment plan, that HOPEFULLY doesn't turn into a ponzi scheme.