Kinked utility and the demand for human wealth and liability insurance
The paper advances the hypothesis that the ’gross wealth’ von Neumann/Morgenstern utility function is characterized by a horizontal branch for wealth levels below the socially guaranteed minimum wealth and analyses the implications of this property for human wealth and liability insurance. It turns out that the attractiveness of these kinds of insurance might, even for risk-averse people, be too low to satisfy the premium requirements of private insurance companies.
(This abstract was borrowed from another version of this item.)
When requesting a correction, please mention this item's handle: RePEc:eee:eecrev:v:17:y:1982:i:2:p:149-162. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
If references are entirely missing, you can add them using this form.