Ok, in that case it’s rather the Xbox that is the scam, but I stand by the use of the word. If that sort of insurance is a good deal, you’re being screwed over somewhere. :)
in that case it’s rather the Xbox that is the scam
I wouldn’t say that; as always, the question is whether the good is +EV and the best marginal use of your money. If the console costs $3 and insurance costs $1 and there’s a >33% chance the console will break and you’ll use the insurance, given how much fun you can have with an Xbox is that really a scam? I wouldn’t say so.
If that sort of insurance is a good deal, you’re being screwed over somewhere.
In practice the insurance that you can buy is too limited and the odds too bad to actually make it a good deal; I did some basic analysis of the issue at http://www.gwern.net/Console%20Insurance and you’re better off self-insuring, at least with post-second-generation Xbox 360s (the numbers look really bad for the first-generation but hard sources are hard to come by).
Depends on the cost of the risk, no? For a first generation XBox 360, paying half the price for a new replacement is not obviously a bad deal...
Ok, in that case it’s rather the Xbox that is the scam, but I stand by the use of the word. If that sort of insurance is a good deal, you’re being screwed over somewhere. :)
I wouldn’t say that; as always, the question is whether the good is +EV and the best marginal use of your money. If the console costs $3 and insurance costs $1 and there’s a >33% chance the console will break and you’ll use the insurance, given how much fun you can have with an Xbox is that really a scam? I wouldn’t say so.
In practice the insurance that you can buy is too limited and the odds too bad to actually make it a good deal; I did some basic analysis of the issue at http://www.gwern.net/Console%20Insurance and you’re better off self-insuring, at least with post-second-generation Xbox 360s (the numbers look really bad for the first-generation but hard sources are hard to come by).