The Effect of Ambiguity Aversion on Insurance and Self-protection
Résumé
In this paper, we derive a set of simple conditions such that ambiguity aversion always raises the demand for self-insurance and the insurance coverage, but decreases the demand for self-protection. We also characterize the optimal insurance design under ambiguity aversion, and exhibit a case in which the straight deductible contract is optimal as in the expected utility model.
Domaines
Sciences de l'Homme et Société
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The Effect of Ambiguity Aversion on Insurance and Self-protection_1 (235.96 Ko)
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