Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76138
Authors: 
Breuer, Michael
Year of Publication: 
2004
Series/Report no.: 
Working Paper, Socioeconomic Institute, University of Zurich 0406
Abstract: 
In the literature on optimal indemnity schedules, indemnities are usually restricted to be non-negative. Gollier (1987) shows that this constraint might well bind: insured could get higher expected utility if insurance contracts would allow payments from the insured to the insurer at some losses. However, due to the insurers' cost function Gollier supposes, the optimal insurance contract he derives underestimates the relevance of the non-negativity constraint on indemnities. This paper extends Gollier's findings by allowing for negative indemnity payments for a broader class of insurers' cost functions.
Subjects: 
Insurance
Indemnity
Deductible
Co-Insurance
JEL: 
D80
D81
D89
Document Type: 
Working Paper

Files in This Item:
File
Size
321.79 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.