On Insurance Contract Design For Low Probability Events
AbstractThis paper extends the analysis of insurance contracts design to the case of "low probability events", when there is a probability mass on the "no accident-zero loss"-event. The optimality of the deductible clause is discussed both at the theoretical and empirical levels.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Spiru Haret University, Faculty of Financial Management and Accounting Craiova in its journal Journal of Applied Economic Sciences.
Volume (Year): 3 (2008)
Issue (Month): 2(4)_Summer2008 ()
Contact details of provider:
Web page: http://www2.spiruharet.ro/facultati/facultate.php?id=14
More information through EDIRC
Optimal insurance design; low probability events.;
Other versions of this item:
- Eric Langlais, 2008. "On insurance contract design for low probability events," EconomiX Working Papers 2008-33, University of Paris West - Nanterre la Défense, EconomiX.
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- G. Carlier & R.A. Dana & N. Shahidi, 2003. "Efficient Insurance Contracts under Epsilon-Contaminated Utilities," The Geneva Risk and Insurance Review, Palgrave Macmillan, vol. 28(1), pages 59-71, June.
- Howard Kunreuther & Mark Pauly, 2004. "Neglecting Disaster: Why Don't People Insure Against Large Losses?," Journal of Risk and Uncertainty, Springer, vol. 28(1), pages 5-21, January.
- Shahidi, Niousha & Carlier, Guillaume & Dana, Rose-Anne, 2003. "Efficient Insurance Contracts under Epsilon-Contaminated Utilities," Economics Papers from University Paris Dauphine 123456789/5463, Paris Dauphine University.
- Raviv, Artur, 1979. "The Design of an Optimal Insurance Policy," American Economic Review, American Economic Association, vol. 69(1), pages 84-96, March.
- Johnson, Eric J, et al, 1993. " Framing, Probability Distortions, and Insurance Decisions," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 35-51, August.
- Mehra, Rajnish & Prescott, Edward C., 1985.
"The equity premium: A puzzle,"
Journal of Monetary Economics,
Elsevier, vol. 15(2), pages 145-161, March.
- Gollier, Christian & Schlesinger, Harris, 1996.
"Arrow's Theorem on the Optimality of Deductibles: A Stochastic Dominance Approach,"
Springer, vol. 7(2), pages 359-63, February.
- Christian Gollier & Harris Schlesinger, 1996. "Arrow's theorem on the optimality of deductibles: A stochastic dominance approach (*)," Economic Theory, Springer, vol. 7(2), pages 359-363.
- Olivier Mahul & Brian D. Wright, 2004. "Implications of Incomplete Performance for Optimal Insurance," Economica, London School of Economics and Political Science, vol. 71(284), pages 661-670, November.
- Chichilnisky, Graciela, 2000. "An axiomatic approach to choice under uncertainty with catastrophic risks," Resource and Energy Economics, Elsevier, vol. 22(3), pages 221-231, July.
- Kocherlakota, Narayana R., 1990. "On tests of representative consumer asset pricing models," Journal of Monetary Economics, Elsevier, vol. 26(2), pages 285-304, October.
- Eeckhoudt, L. & Gollier, C., 1996. "The Insurance of Low Probability Events," Papers 976.423, Toulouse - GREMAQ.
- Edi Karni, 1990. "Optimal Insurance: A Nonexpected Utility Analysis," Discussion Paper Serie A 288, University of Bonn, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Stefanescu).
If references are entirely missing, you can add them using this form.