IDEAS home Printed from https://ideas.repec.org/p/hal/wpaper/hal-04401333.html
   My bibliography  Save this paper

Self-insurance and market insurance substitutability: an established tenet reconsidered
[Substituabilité de l'auto-assurance et de l'assurance de marché : un principe établi reconsidéré]

Author

Listed:
  • Jean-Marc Bourgeon

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique, UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Pierre Picard

    (CREST-INSEE - Centre de Recherche en Economie et en Statistique - Institut national de la statistique et des études économiques (INSEE))

Abstract

We analyze the interaction between self-insurance and market insurance when accident losses are multivalued. We show that self-insurance and market insurance may be complementary when self-insurance expenses do not affect much the probability distribution of large losses and the loading factor is high. This contrasts sharply with the conclusion of Ehrlich and Becker (1972) who establish the substitutability between self-insurance and market insurance when the cost of an accident is single-valued. The results are derived theoretically and illustrated through numerical simulations.

Suggested Citation

  • Jean-Marc Bourgeon & Pierre Picard, 2024. "Self-insurance and market insurance substitutability: an established tenet reconsidered [Substituabilité de l'auto-assurance et de l'assurance de marché : un principe établi reconsidéré]," Working Papers hal-04401333, HAL.
    • Handle: RePEc:hal:wpaper:hal-04401333
    Note: View the original document on HAL open archive server: https://hal.science/hal-04401333
    as

    Download full text from publisher

    File URL: https://hal.science/hal-04401333/document
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:wpaper:hal-04401333. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.