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Optimality of deductible: a characterization, with application to Yaari’s dual theory

Alain Chateauneuf (), Michèle Cohen and Mina Mostoufi
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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: 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)
Date: 2022
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DOI: 10.1007/s11238-022-09880-1

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