Optimality of deductible: a characterization, with application to Yaari’s dual theory
Alain Chateauneuf (),
Michèle Cohen and
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Michèle Cohen: Université de Paris I and CES-Université de Paris I
Mina Mostoufi: Allianz Benelux
Theory and Decision, 2022, vol. 92, issue 3, No 6, 569-580
Abstract The main purpose of this paper is to show that left-monotone risk aversion, a meaningful refinement of strong risk aversion, characterizes decision makers for whom deductible insurance is optimal. A second goal is to prove that the deductible’s computation is particularly tractable in the case of Yaari’s decision makers.
Keywords: Yaari’s model; Jewitt’s left-monotone risk aversion; Optimality of deductible (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:92:y:2022:i:3:d:10.1007_s11238-022-09880-1
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