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Arrow's Theorem on the Optimality of Deductibles: A Stochastic Dominance Approach

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Listed:
  • Gollier, Christian
  • Schlesinger, Harris

Abstract

We provide a new proof for the optimality of deductible insurance that does not depend on the expected-utility hypothesis. Our model uses only first- and second-degree stochastic dominance arguments.

Suggested Citation

  • Gollier, Christian & Schlesinger, Harris, 1996. "Arrow's Theorem on the Optimality of Deductibles: A Stochastic Dominance Approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 359-363, February.
  • Handle: RePEc:spr:joecth:v:7:y:1996:i:2:p:359-63
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    1. Dalia Marin & Thierry Verdier, 2008. "Power Inside The Firm and The Market: A General Equilibrium Approach," Journal of the European Economic Association, MIT Press, pages 752-788.
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    18. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, pages 297-308.
    19. repec:hrv:faseco:4784031 is not listed on IDEAS
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