Too Few Risk Takers

J. Black and David de Meza

Discussion Papers from University of Exeter, Department of Economics

Abstract: This paper shows that costly state verification creates a bias against risky activities in the policy relevant sense that everyone may gain if entry to them is subsidised. The result holds even in the presence of private insurance. In fact, it may be preferable to ban private insurance and rely on subsidies to risky occupations.

Keywords: RISK (search for similar items in EconPapers)
JEL-codes: D52 D80 (search for similar items in EconPapers)
Pages: 20 pages
Date: 1995
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Persistent link: https://EconPapers.repec.org/RePEc:exe:wpaper:9504

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