## swimmergirl 3 years ago I need help gathering some ideas for a research paper I have to write. The topic is focused on the question, "When is the price too high?". (That means that the topic deals with risks)

1. Carl_Pham

Consider the insurance industry. The way insurance works is like this: I pay a life insurance company \$1,000 a year for 10 years. If I die in those ten years, my family gets \$500,000. If I don't, nothing happens (except I'm out \$10,000). The insurance company has studied the statistics of life and death very closely, of course. So they know with great precision that the probability of my dying in those ten years is much less than 1 out 50. Let's say it's 1 out of 100. So if they make this same deal with 100 customers, 99 will pay premiums for ten years and 1 will die and his family will collect \$500,000. The insurance company will collect 99 x \$10,000 = \$990,000 in premiums and pay out \$500,000, for a net profit of \$490,000. Sweet! But here's the thing. Everyone KNOWS that the insurance company is charging you way more than the "fair" price of the insurance. (The fair price is the price that would end up with the insurance company not making any money. In this case, it would be \$505.05 per year, not \$1,000.) So why do people, nevertheless, still gladly buy insurance? It's clearly a psychological thing: people fear big surprise losses more than very predictable small losses, even when the latter add up to less than the former. Nor is that dumb: it's much easier to cope with predictable losses than surprise losses. So "price" in terms of risk can have a strong element of how predictable the risk is. And as a consequence some of the wealthiest companies around are insurance companies.

2. Redwood_Girl

So, swimmergirl, have you hit upon a topic? The general question is so intriguing -- for don't we face this same issue repeatedly in our lives? -- I thought about it all afternoon yesterday.

3. swimmergirl

:) sadly I have not thought of an idea.....well I guess I have thought about doing something about peer pressure in our teen population....

4. Redwood_Girl

That's a rich topic. You ought to find quite a lot to write about with respect to risk. To weighing the risks against the benefits. Do teens sometimes do things without considering the full risk? Or do the risks (and fear of the outcome, or recognition of a possible bad outcome) simply not stand up against the pressure of doing what others want or ask us to do, particularly at that age?

5. swimmergirl

so I'm guessing that that is a good topic :D could you possibly find some information about that topic for me?

6. Redwood_Girl

7. swimmergirl

:) thank you!!! This will get me started :)

8. Redwood_Girl

Cool! :)

9. Cryptic57

Criminal statistics may be of use. There are many people, especially teens, paying dearly for their mistakes. Does the punishment fit the crime? What sort of mistakes are made by the various subgroups? Hospital statistics may give an even bleaker picture but some equally interesting topics.

10. Redwood_Girl

Yes, well, and then you begin to get into the social aspects of crime and the criminal justice (or not always so just) system. Kids from poorer families, from troubled families, the more so if they are also kids of color, don't fare as well in this system, either from the perspective of the opportunities not so available to them (at home, at school, in life) or from the perspective of how the system tends to view and treat them. The issue is very thorny. Here's one that leaves out the criminal system: what about teen pregnancy? What about STDs? What price do the teens pay when the adults who govern their lives decide *not* to educate them about how to protect themselves? "Just say no" doesn't work in this realm any more than it does in the other. Of course, that one's a loaded issue.

11. Cryptic57

It may be a loaded one and it needs to be discharged. Saying no and believing the "authority" that backs such a stance can lead to all sorts of problems. If "they" lied to me about that, where do I find the truth? etc The price can be the breakdown of families and groups/societies, but the price may not come due for many years. How risky is it to trust in faith? ...... to believe in our parents/authority? Please let the group know where you go with this. Cheers

12. Redwood_Girl