Abstract
This paper attempts to fulfill three missions: (i) To make the law of large numbers a theory; (ii) To explain the business of casinos and insurance companies; (iii) To expel moral hazard. The law of large numbers, though well established in statistics, is widely ignored in economics. While economists have spent endless time and energy on consumer’s behavior on risk, they do not spend much on the seller part. Such sellers operate on the law of large numbers, full stop, they said. But then, why did some go bankrupted? This paper attempts to fill the gap of making the law of large numbers a theory. It will then apply this theory to explain the business of casinos and insurances, and to correct the misunderstanding around “moral hazard.”
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
