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Self-Insurance and Self-Protection: A Nonexpected Utility Analysis

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  • Kai A. Konrad

    (Department of Economics, University of Munich, Schackstrasse 4, D-80539 Munich, Germany)

  • Stergios Skaperdas

    (Department of Economics, School of Social Sciences, University of California, CA 92717 Irvine)

Abstract

This paper studies the comparative statics of self-insurance and self-protection for individuals with rank-dependent expected utility preferences. In particular, proportional wealth risks, background risk, and limited liability are considered. Limited liability has a major impact on self-insurance and self-protection. It can reverse seemingly robust comparative static results for the case of self-insurance and can eliminate some puzzling ambiguities for the case of self-protection. The Geneva Papers on Risk and Insurance Theory (1993) 18, 131–146. doi:10.1007/BF01111466

Suggested Citation

  • Kai A. Konrad & Stergios Skaperdas, 1993. "Self-Insurance and Self-Protection: A Nonexpected Utility Analysis," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 18(2), pages 131-146, December.
  • Handle: RePEc:pal:genrir:v:18:y:1993:i:2:p:131-146
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    Cited by:

    1. Kvaløy, Ola & Olsen, Trond E., 2015. "The tenuous relationship between effort and performance pay," Journal of Public Economics, Elsevier, vol. 121(C), pages 32-39.
    2. repec:eee:eecrev:v:101:y:2018:i:c:p:230-249 is not listed on IDEAS
    3. Mario Brandtner, 2016. "Spektrale Risikomaße: Konzeption, betriebswirtschaftliche Anwendungen und Fallstricke," Management Review Quarterly, Springer;Vienna University of Economics and Business, vol. 66(2), pages 75-115, April.
    4. Biener, Christian & Eling, Martin & Pradhan, Shailee, 2016. "Can Group Incentives Alleviate Moral Hazard? The Role of Pro-Social Preferences," Working Papers on Finance 1610, University of St. Gallen, School of Finance, revised Nov 2016.
    5. François Maréchal, 2009. "Prevention of diseases and preventive co-payment rate," Economics Bulletin, AccessEcon, vol. 29(3), pages 2333-2342.

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