A Theory of Insurance and Gambling: Replacing Risk Preferences with Quid Pro Quo

by John A. Nyman

In 1948, Milton Friedman and L. J. Savage suggested that risk preferences explain the demand for insurance and gambling--a theory that is still almost universally accepted by economists today. If you were to ask almost any economist why people purchase insurance, they would say it is because most people are "risk averse," or equivalently, "prefer certainty of losses." If asked to explain why people gamble, they would say it is because some people...

• Format: Hardcover
• Language: English
• ISBN: 019768792X
• ISBN13: 9780197687925
• Release Date: February 2024
• Publisher: Oxford University Press
• Length: 272 Pages
• Weight: 1.10 lbs.
• Dimensions: 1.4" x 6.4" x 8.9"