Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/30249 
Year of Publication: 
2010
Series/Report no.: 
Kiel Working Paper No. 1613
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
Most pure public goods like lighthouses, dams, or national defense provide utility mainly by insuring against hazardous events. Our paper focuses on this insurance character of public goods. As for private actions against hazardous events, one can distinguish between self-insurance (SI) and self-protection (SP) also in the context of public goods. For both cases of SI and SP we analyze efficient public provision levels as well as provision levels resulting from Nash behavior in a private provision game. An interesting aspect of considering public goods as insurance devices is the interaction with market insurance. It turns out that the availability of market insurance reduces the provision level of the public good for both, the public and the private provision, regardless of whether we consider SI or SP. Moreover, we show that Nash behavior has always a larger impact than the availability of market insurance.
Subjects: 
Self-insurance
self-protection
private provision of public goods
market insurance
JEL: 
G22
H41
Document Type: 
Working Paper

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