Presuming Bets are Bad
In recent months, there have been millions of dollars bet in options markets, as traders seek a big payday in the event that the economy heads south – and this hasn't raised an eyebrow. But when an Aussie bookie began offering bets on whether the Australian economy is headed for recession, he stirred up a bit of strife. Federal Treasurer Wayne Swan called the bookie's actions "utterly irresponsible." The contrast between the Treasurer's response to financial trades and bookies' bets provides a nice example of how people respond differently, depending on how a bet is framed.
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By Robin Hanson · Hundreds of paid subscribers
This is a blog on why we believe and do what we do, why we pretend otherwise, how we might do better, and what our descendants might do, if they don't all die.
And it is considered responsible to make longshot high payoff bets that close family members will die unexpectedly.
That is a very good point.
And it is considered responsible to make longshot high payoff bets that close family members will die unexpectedly.