This idea is half-baked; it has some nice properties but doesn't seem to me like a solution to the problem I most care about. I'm publishing it because maybe it points someone else towards a full solution, or solves a problem they care about, and out of a general sense that people should publish negative results.

Many risky activities impact not just the person doing the activity, but also bystanders or the public at large. Governments often require ability to compensate others as a precondition for engaging in the risky activity, with requirements to have car insurance to drive as a common example.

In most situations, this works out fine:

A competitive insurance market means that customers aren't overcharged too much (since they'll switch insurance providers to whoever estimates their risk as being the lowest).
Accidents are common enough that insurance companies that are bad at pricing quickly [...]

The original text contained 3 footnotes which were omitted from this narration.

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First published:
December 11th, 2023

Source:
https://www.lesswrong.com/posts/Q2gd5G6FxFR65pDFc/secondary-risk-markets

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Narrated by TYPE III AUDIO.

“Secondary Risk Markets” by Vaniver

LessWrong (30+ Karma)

“Secondary Risk Markets” by Vaniver