Insurance.
The one thing I would proffer is, never regulate insurance companies.
I've heard such solemn men as U.S. Senator Schumer refer to market activities as being "gambles." As if gambling were a bad thing. Gambling is a necessary component of market capitalism.
Price Discovery
What is a thing worth?
Before I attempt an answer, let me ask you, what do you know about what determines price? I really want to know what you think determines price. A discussion of value without an understanding of the determinants of price is a discussion of art without sight, sound, taste, touch or smell.
Let us have a discussion of what determines the price of a thing.
Unless we have a discussion, we can never understand how far we've lost the concept of price in determining how we behave. When anything is free, there can never be enough of it.
3 comments:
What the market will bear.
I determine price. If I consider an offered price unacceptable, I will not buy from that vendor (or sell, if that's what I'm doing).
Now, in terms of insurance, that's a different story: you're purchasing a contract for agreed-upon compensation in event of loss. If we agree that accidental loss of an arm is worth $2500, neither of us gets to change the terms in the event that such an incident occurs.
Supply and demand normally determine price.
...relative or effective scarcity versus perceived value, perceived effectiveness and desire.
Value is in the eye of the beholder, in the context of what alternatives are available in the marketplace, and what opportunities are foregone.
Kalashnikat
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