Self‐Insurance and Self‐Protection as Public Goods
AbstractMost pure public goods like lighthouses, dams, or national defense provide utility mainly by insuring against hazardous events. Our paper focuses on this insurance character of public goods. As for private actions against hazardous events, one can distinguish between self-insurance (SI) and self-protection (SP) also in the context of public goods. For both cases of SI and SP we analyze efficient public provision levels as well as provision levels resulting from Nash behavior in a private provision game. An interesting aspect of considering public goods as insurance devices is the interaction with market insurance. It turns out that the availability of market insurance reduces the provision level of the public good for both, the public and the private provision, regardless of whether we consider SI or SP. Moreover, we show that Nash behavior has always a larger impact than the availability of market insurance
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Bibliographic InfoArticle provided by The American Risk and Insurance Association in its journal The Journal of Risk and Insurance.
Volume (Year): 79 (2012)
Issue (Month): 1 (03)
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Other versions of this item:
- Ulrich Schmidt, 2010. "Self-Insurance and Self-Protection as Public Goods," Kiel Working Papers 1613, Kiel Institute for the World Economy.
- Schmidt, Ulrich & Robledo, Julio R. & Lohse, Tim, 2007. "Self-Insurance and Self-Protection as Public Goods," Economics Working Papers 2007,16, Christian-Albrechts-University of Kiel, Department of Economics.
- Lohse, Tim & Julio R. Robledo & Ulrich Schmidt, 2006. "Self-Insurance and Self-Protection as Public Goods," Diskussionspapiere der Wirtschaftswissenschaftlichen FakultÃ¤t der Leibniz UniversitÃ¤t Hannover dp-354, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies
- H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
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