Are compulsory insurance and self-insurance substitutes or complements? A matter of risk attitudes

François Pannequin and Anne Corcos ()
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Anne Corcos: CURAPP-ESS UMR 7319 CNRS and Université de Picardie Jules Verne

The Geneva Risk and Insurance Review, 2020, vol. 45, issue 1, No 2, 24-35

Abstract: Abstract This article analyzes the effects of compulsory insurance on the demand for self-insurance. We show that although a risk lover invests neither in insurance nor in self-insurance when insurance is voluntary, she invests in self-insurance when insurance is compulsory. On the contrary, when insurance is mandatory, a risk averter would substitute self-insurance for insurance. Economic policy implications of these antagonistic effects on self-insurance are discussed.

Keywords: Self-insurance; Compulsory insurance; Risk attitudes; Risk lovers (search for similar items in EconPapers)
JEL-codes: D11 D86 G22 K32 L51 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pal:genrir:v:45:y:2020:i:1:d:10.1057_s10713-019-00043-x

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DOI: 10.1057/s10713-019-00043-x

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