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Full-Text Articles in Insurance
Risk Invulnerability : The Impact Of A Desirable Background Risk, Sai Kit Hui
Risk Invulnerability : The Impact Of A Desirable Background Risk, Sai Kit Hui
Lingnan Theses and Dissertations
I extend the classical risk vulnerability definition proposed by Gollier and Pratt (1996) and suggest a new definition namely risk invulnerability, which is to say a desirable background risk that has a positive mean value exceeding the precautionary saving premium makes a decision maker less risk averse with respect to other independent risk. While the value function used in Milne and Robertson (1996) is comparable to the von Neumann Morgenstern utility function used in risk invulnerability, I follow the literature and show that a corporate under stochastic wealth and threat of liquidation is risk invulnerable when the wealth level of …
Optimal Insurance Brokerage Commission, Arthur Hau
Optimal Insurance Brokerage Commission, Arthur Hau
Hong Kong Institute of Business Studies Working Paper Series
This paper studies a principal-agent insurance brokerage problem with a risk-averse principal (an insured) and a risk-neutral agent(a broker). The concept of “mean-preserving spread-reducing effort” is introduced to delineate the broker's activities. Using the first-order approach, it is shown that under some common conditions, the insured may “concavify” the reward function to induce the risk-neutral agent to exert MPSR brokering effort. Surprisingly, these conditions together with an additional condition guarantee the validity of the first-order approach even when the monotone likelihood ratio condition (used exclusively to justify the first-order approach) is violated. The case with a risk-averse agent is also …
Reducing Moral Hazard In Deposit Insurance : A Policy Instrument For Generating Regulatory Information, Chengze, Simon Fan
Reducing Moral Hazard In Deposit Insurance : A Policy Instrument For Generating Regulatory Information, Chengze, Simon Fan
Centre for Public Policy Studies : CPPS Working Paper Series
No abstract provided.