Micropayments, Microinsurance, and Macroinsurance
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From: Peter Langston <psl>
Date: Mon, 4 May 98 21:53:50 -0700
Subject: Micropayments, Microinsurance, and Macroinsurance
From: Jim Hickstein <email@example.com>
Apropos of micropayment, I conceived of a new, related thing: microinsurance.
I'll bet you 5 cents it doesn't rain this afternoon as I run to my car.
That sort of thing.
But then it struck me: this is indistinguishable from wagering, which is
probably illegal. Then it struck me: microinsurance is indistinguishable
from macro-insurance in this regard. Hmmmm.
[If the person who makes the bet with you turns around and sells
the bet to someone else, it's known as ``securitization''.
If, instead of this afternoon, your wager is about rainfall in
September, it's ``options trading''.
If someone discovers that someone *else* is betting 6 cents that
they *will* get rained on while running to a car in the same parking
lot on the same day in September, and can combine these two wagers
for a guaranteed profit, this is known as ``arbitrage''. --- dm]
© 1998 Peter Langston