As a related tangent, I've been wondering why people continue to pay for anything beyond basic coverage for their car once they are well off enough to easily cover repair bills, or even to simply buy a whole new car with cash. I have been unsuccessful in convincing people of this. ALL, insurance is a bad deal to the extent you can cover it yourself. In a proper free market, the only non-liability insurance many of us would need is catastrophic health coverage (pick your deductible) and possibly homeowner's.
The comparison is apt. Thus both must be a good deal. Thus "most economists"' understanding of extended warranty must be wrong. As they say, one man's modus ponens is another's modus tollens :)
In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any given living entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought.”
There is also the expectation of what is covered. Canadians learn that certain medical conditions are better served by forgoing the free service and doing a medical tour in America. The clearest example is model airplanes. When Mattel came out with a radio controlled model airplane in the early 70s virtually all of them came back to the toy store when they crashed. But a similar model airplane purchased from a hobby shop never came back. It is well known in that culture that all model airplanes crash and need fixing. That's what model airplanes do. That's not what toys do.
Imagine you are being forced to pay the cost of the extended warranty, while not enjoying any coverage benefits. This is our lot in the United States. If I'm paying for it regardless, at least let me get the coverage.
No competition. An extended warranty is offered at the point of sale, and if you don't take it there, they don't tend to offer it later. You certainly don't have multiple insurers competing to sell you an extended warranty. And there is not enough demand for extended warranties (outside of the high-pressure tactics following the original sale) to create a market.
You are the master of short, entertaining essays. Good gosh, I just read an essay about EXTENDED WARRANTIES! 😂
The government is the worst provider of solutions.
As a related tangent, I've been wondering why people continue to pay for anything beyond basic coverage for their car once they are well off enough to easily cover repair bills, or even to simply buy a whole new car with cash. I have been unsuccessful in convincing people of this. ALL, insurance is a bad deal to the extent you can cover it yourself. In a proper free market, the only non-liability insurance many of us would need is catastrophic health coverage (pick your deductible) and possibly homeowner's.
The comparison is apt. Thus both must be a good deal. Thus "most economists"' understanding of extended warranty must be wrong. As they say, one man's modus ponens is another's modus tollens :)
In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any given living entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought.”
-Ayn Rand
There is also the expectation of what is covered. Canadians learn that certain medical conditions are better served by forgoing the free service and doing a medical tour in America. The clearest example is model airplanes. When Mattel came out with a radio controlled model airplane in the early 70s virtually all of them came back to the toy store when they crashed. But a similar model airplane purchased from a hobby shop never came back. It is well known in that culture that all model airplanes crash and need fixing. That's what model airplanes do. That's not what toys do.
Imagine you are being forced to pay the cost of the extended warranty, while not enjoying any coverage benefits. This is our lot in the United States. If I'm paying for it regardless, at least let me get the coverage.
Why hasn't the market driven the price of extended warranties towards costs?
No competition. An extended warranty is offered at the point of sale, and if you don't take it there, they don't tend to offer it later. You certainly don't have multiple insurers competing to sell you an extended warranty. And there is not enough demand for extended warranties (outside of the high-pressure tactics following the original sale) to create a market.