Insurance is exactly a mechanism that transforms high-variance penalties in the future into consistent penalties in the present: the more risky you are, the higher your premiums.
Then insurance as you’ve defined it is not a specific mechanism, it’s a category of mechanisms, most of which don’t do the thing they’re supposed to do. I want to do mechanism design. I want to make a proposal specific enough to be carried out irl.
Insurance is exactly a mechanism that transforms high-variance penalties in the future into consistent penalties in the present: the more risky you are, the higher your premiums.
Then insurance as you’ve defined it is not a specific mechanism, it’s a category of mechanisms, most of which don’t do the thing they’re supposed to do. I want to do mechanism design. I want to make a proposal specific enough to be carried out irl.