On Mutual Insurance

Y.M. Ermoliev and Sjur Flåm

Norway; Department of Economics, University of Bergen from Department of Economics, University of Bergen

Abstract: Owners of stochastic assets can pool their endowments to smoothen and insure individual payoffs across outcomes and time. We explore, in such a setting, how contingent shadow prices on aggregate resources can be used for three purposes: first, to design mutual contracts for risk averse agents; second, to quantify the malfunctioning of such contracts when there are risk lovers (or scale economies); and third, to estimate reasonable premiums for insurance offered by outside agents.

Keywords: RISK; INSURANCE; GAME THEORY (search for similar items in EconPapers)
JEL-codes: C70 D81 G22 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:fth:bereco:2299

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