ON INSURANCE CONTRACT DESIGN FOR LOW PROBABILITY EVENTS
ON INSURANCE CONTRACT DESIGN FOR LOW PROBABILITY EVENTS
Author(s): Enric LanglaisSubject(s): Economy
Published by: Reprograph
Keywords: optimal insurance design; low probability events
Summary/Abstract: This paper extends the analysis of insurance contracts design to the case of "low probability events", when there is a probability mass on the "no accident-zero loss"-event. The optimality of the deductible clause is discussed both at the theoretical and empirical levels.
Journal: Journal of Applied Economic Sciences (JAES)
- Issue Year: III/2008
- Issue No: 05
- Page Range: 113-120
- Page Count: 8
- Language: English