Application of the “Marketing Concept” in the Life Insurance Industry

Joe H. Murrey, R. Keith Tudor and Kenneth W. Hollman

Journal of Insurance Issues, 1991, vol. 14, issue 2, 31-50

Abstract: Kahneman and Tversky proved that the preference of regular insurance over probabilistic insurance by expected utility maximizers was inconsistent with the risk-aversion hypothesis given the intuitive riskiness of the probabilistic insurance game. This note considers the idea of costly probabilistic insurance and proves that regular insurance would be preferred to probabilistic insurance for a risk-averse expected utility maximizer.

Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:wri:journl:v:14:y:1990:i:2:p:31-50

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