By this argument, someone who is risk-averse should buy insurance, even though you lose money in expectation. Most of the time, this money is wasted. Interestingly, X risk research is like buying insurance for humanity as a whole. It might very well be wasted, but the downside of not having such insurance is so much worse than the cost of insurance that it makes sense (if you are risk neutral and especially if you are risk-averse).
I agree. Although some forms of personal insurance are also rational. Eg health insurance in the US because the downside of not having it is so bad. But don’t insure your toaster.
By this argument, someone who is risk-averse should buy insurance, even though you lose money in expectation. Most of the time, this money is wasted. Interestingly, X risk research is like buying insurance for humanity as a whole. It might very well be wasted, but the downside of not having such insurance is so much worse than the cost of insurance that it makes sense (if you are risk neutral and especially if you are risk-averse).
Edit: And actually some forms of global catastrophic risks are surprisingly likely, for instance a 10% global agricultural shortfall has about an 80% probability this century. So preparation for this would most likely not be wasted.
I agree. Although some forms of personal insurance are also rational. Eg health insurance in the US because the downside of not having it is so bad. But don’t insure your toaster.