I have a question: Why do some people admit to being a called name?

[Bullet Sniper]

For example, when someone does or says something that's really really outlandish and something that simply sounds extremely contradictory or wrong... the other person would tend to quickly respond with "Are you crazy?", "Are you a moron?", "Are you insane"?, etc. or calls that person some names. But then the other person just swiftly and smoothly responds by saying "Yes, I am crazy" or "Yes, I am a moron." or "Yes, I am insane" or just proudly admits it.

Why does the other person actually want to agree to be called a certain name when being questioned on the veracity of his ideas, even if it's sarcastic?

[JCAll]

Self-deprecating humor? It doesn't pay to be thin-skinned, name calling ultimately means nothing so why not have a laugh about it.

[GOLGO 13]

Because that person knows he/she is absolutely right & that no mere insults can change the outcome.

[Tami]

An old joke: "If I'm crazy, then what are you?"

But I agree, the person either believes/knows they are right, or they just don't care what anyone else says about them.

[WillieMorgan]

Well, going off the specific situation that you've cited in your OP, the person asking 'Are you crazy?' isn't really calling anyone names. It's just a turn of phrase. What he or she is really saying is 'You do realise what you've just said don't you?'. Nobody's really accusing anyone else of being mentally unbalanced. It's not an insult as such as it's just a common saying.

Responding with 'Yes, I am crazy' is more like admitting to making a bold or outrageous statement about something than actually declaring yourself insane.

Probably be a bit different if it was a more volatile accusation. 'What are you, some kind of knobhead!?' probably won't get the same response .

[ed2962]

For example, when someone does or says something that's really really outlandish and something that simply sounds extremely contradictory or wrong... the other person would tend to quickly respond with "Are you crazy?", "Are you a moron?", "Are you insane"?, etc. or calls that person some names. But then the other person just swiftly and smoothly responds by saying "Yes, I am crazy" or "Yes, I am a moron." or "Yes, I am insane" or just proudly admits it.

Why does the other person actually want to agree to be called a certain name when being questioned on the veracity of his ideas, even if it's sarcastic?

It's a way to take the piss out of the first person. The first person is trying to hurt/criticize you. By saying "Yes, I am! Now what?" you're slightly mitigating their attack