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Betting markets in everything
A Buckinghamshire man diagnosed with terminal cancer is to collect a second winning payout of £5,000 after betting he would stay alive.
Jon Matthews, 59, from Milton Keynes, was diagnosed with mesothelioma, a cancer linked to asbestos, in 2006 and told he had months to live.
He placed two bets, each with a £100 stake at odds of 50/1, that he would be alive in June 2008 and in June 2009.
A third wager will earn him a further £10,000 if he lives until 1 June 2010.
The full story is here and I thank Leonard Monasterio for the pointer. Of course you are implicitly betting on your life each time you make an investment or a long-range plan.
Posted by Tyler Cowen on May 31, 2009 at 06:41 AM in Medicine | Permalink
Comments
Those who fear that the insurance industry will abuse the use of DNA testing should take note...so should the insurance industry.
Posted by: Ward at May 31, 2009 8:15:33 AM
Bequest motive aside, one presumes.
Posted by: Bob the wombat at May 31, 2009 8:27:30 AM
From Milton Keynes? Ironic.
Posted by: ceg at May 31, 2009 10:35:58 AM
Wait a second... did he have to put the money down up front? If not, this is much better than an investment, it's an investment using an interest-free loan for capital!
Put differently: if I don't have to put the money down up front, I hereby offer to take any standard bet, at any odds that I'll be alive at an arbitrary date of your choice.
Posted by: Paul Gowder at May 31, 2009 10:46:04 AM
The moral hazard here seems to be welfare improving.
Posted by: Kyle at May 31, 2009 11:09:05 AM
The bet was with the British betting agency William Hill, which is known for accepting unusual wagers (on the condition that bettors agree to the bet being publicized).
Interestingly, when people bet on their own ability to lose weight, 80 per cent lose the wager.
Posted by: anonymous at May 31, 2009 11:18:33 AM
'Of course you are implicitly betting on your life each time you make an investment or a long-range plan.'
And here in a nutshell is why most Americans are unable to grasp why they have a ruling class - not everything is merely me, me, me. Not the DuPonts or Rockefellers or even such relative newcomers as the Bushes or Kennedies are interested in answering questions about their long term investments.
Posted by: at May 31, 2009 12:18:25 PM
Of course you are implicitly betting on your life each time you make an investment or a long-range plan.
Like life insurance?
Posted by: sidereal at May 31, 2009 1:52:42 PM
Here's the bet millions of Americans are faced with: at what year do I begin drawing unemployment? For someone who is 62 and unemployed, delaying drawing on Social Security is a similar bet, but much more complicated, with far more money at stake.
Posted by: mulp at May 31, 2009 3:41:16 PM
I believe this is what the actuarial industry calls a deferred temporary annuity
Posted by: Steven H. Noble at May 31, 2009 4:43:04 PM
The moral hazard here seems to be welfare improving.
The moral hazard affecting the sick man perhaps. I wouldn't want to make the same bet if the other party was Tony Soprano.
Posted by: doctorpat at May 31, 2009 10:36:00 PM
"From Milton Keynes? Ironic." -ceg
Why? Milton Friedman did most of his work from within a largely Keynesian paradigm.
Posted by: Jayson Virissimo at Jun 1, 2009 3:31:12 AM
I have no problem with a person betting that he will survive; I do question the morals of the person taking the other side of the wager. But I'm probably in the minority, at least here at MR.
Posted by: a at Jun 1, 2009 9:08:35 AM
It's striking how much the rhetoric around the financial crisis resembles the rhetoric around the war on terror. "Something had to be done. This was something. If the results resemble anything better than catastrophe, it is a sign of our successful policy. you'll thank us later." Cheney should sue for plagurism.
Posted by: wph at Jun 1, 2009 11:56:47 AM
I had assumed that this post is just a scam to get the highest paying Google Ads word "mesothelioma" into a post, but then I don't see any Google Ads.
Scamsters, take note, however!
Posted by: Steve Sailer at Jun 1, 2009 5:47:22 PM
Making a bet to obtain a payment that you receive only in the event of attaining a particular age is nothing new-it's a "pure endowment" and its illegal in most of the U.S. as contrary to public purpose because the counterparty is betting against your survival.
Posted by: Phil at Jun 1, 2009 10:48:55 PM
I'm pretty sure this is exactly how life insurance is managed on Luna in Heinlein's The Moon is a Harsh Mistress.
Tanstaafl!
Posted by: Oliver Morton at Jun 2, 2009 11:45:01 AM
Am I the only one who thinks that offering the same odds for 'you will be alive in June 2009' and 'you will be alive in June 2008' seems like bad bookmaking? One of the two bets was either massively overpriced or massively underpriced.
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@John.
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