A simple insurance model: optimal coverage and deductible

Christopher Gaffney () and Adi Ben-Israel ()
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Christopher Gaffney: Rutgers Center for Operations Research
Adi Ben-Israel: Rutgers Center for Operations Research and School of Business

Annals of Operations Research, 2016, vol. 237, issue 1, No 14, 263-279

Abstract: Abstract An insurance model, with realistic assumptions about coverage, deductible and premium, is studied. Insurance is shown to decrease the variance of the cost to the insured, but increase the expected cost, a tradeoff that places our model in the Markowitz mean-variance model.

Keywords: Insurance; Optimal coverage; Deductible; Markowitz mean-variance model (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s10479-013-1469-2

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