Markets in everything, joys of contradiction edition

First, engage a company to monitor your exercise regime and punish you financially if you fail; then, buy insurance against the risk of failure.

That’s from Tim Harford, noting that the latter market is still a gleam in someone’s eye.

Comments

Do you remember the Stephen King story called "Quitters, Inc."?!?

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Some people may have very weak self-control despite a financial commitment. Taking out insurance against the bond incents the insurer to cooperate with them towards the goal.

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There's no peril that can be insured against here, and therefore no
insurable interest.
If failure of this sort could be insured against, then so could school
kids failing school courses. They certainly face long-run financial
consequences of failing in school, yet there is no insurance market here.
Maybe cracking a basic insurance book would be in order.
Harold D. Skipper and Kenneth Black on Life and Health Insurance is good.

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How do they control if someone really achieved his or her goals? I would probably anticipate the possibility to save my money using a simple lie. Thus, the incentive doesn't work - and doesn't work from day one on.

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