Practice question · True or false
According to Knight, entrepreneurs can insure away the uncertainty of whether their product will succeed.
Hints
- Insurers need measurable odds before they can write a policy.
- Whether a genuinely new product will sell has no such odds.
Show the answer
False
Why
Insurable events are risk. True uncertainty, like market acceptance of something new, has no measurable odds, so no insurer will price it. Bearing it is what profit rewards.
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