Self-protection and insurance with interdependencies
- We study optimal investment in self-protection of insured individuals when they face interdependencies in the form of potential contamination from others. If individuals cannot coordinate their actions, then the positive externality of investing in self-protection implies that, in equilibrium, individuals underinvest in self-protection. Limiting insurance coverage through deductibles or selling “at-fault” insurance can partially internalize this externality and thereby improve individual and social welfare. JEL Classification: C72, D62, D80
| Author: | Howard Kunreuther, Alexander Muermann |
|---|---|
| URN: | urn:nbn:de:hebis:30-39822 |
| Parent Title (German): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2007,22 |
| Series (Serial Number): | CFS working paper series (2007, 22) |
| Document Type: | Working Paper |
| Language: | English |
| Year of Completion: | 2007 |
| Year of first Publication: | 2007 |
| Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Release Date: | 2007/06/13 |
| Tag: | externality; insurance; mitigation |
| GND Keyword: | Privater; Versicherungsschutz |
| Issue: | May 30, 2007 |
| Page Number: | 27 |
| HeBIS-PPN: | 190225858 |
| Institutes: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
| Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Licence (German): |  Deutsches Urheberrecht |
