![]() There are good reasons to believe that the act of betting improves welfare just by letting people tailor the world to their risk preferences. There are some important clarifications for instance, banks are much less in the business of making bets (gambling) than they are in the business of taking bets from customers (bookmaking). ![]() We've just shifted money around between ourselves we've done nothing to change the outside world. If I bet you $100 that the Jets will win this weekend, then the Jets will win and I will have $100 more and you will have $100 less, or the Jets will lose and you will have $100 more and I will have $100 less, and the Jets don't care either way. In some simple sense anything you do to change your possible future can be called a "bet" - if you invest in my lemonade-stand startup, you are "betting on my success" - but one common and sensible use of the word "bet" involves zero-sum-ness. ![]() The answer to your comment is: sure! Sure, derivatives are bets. ![]()
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