[crucini]

I think both your points are valid: the "Black Swan" nature of the criminal liability, and the baseline risk. How can we reformulate the scenario to avoid both? Also, I want to emphasize the reformer's level of belief in his reform, rather than ability to pick the perfect inmate.

How about these changes?

* No criminal liability for the reformer - it all gets converted to civil financial liability. So a murder might be $1M; simple theft might be triple the value of the stolen article.

* Reformer's initial payment includes an offset for "average criminality", using the above dollar conversions. So if the reformee exhibits average criminality in the remainder of his life, the reformer only pays back that offset.

* Inmate is picked by lottery, excluding those with strong signs of unreformability.

I'm afraid these mods make the example less intuitive.