Abstract
We study the interaction between self-insurance and market insurance when accident losses are multivalued. We show that self-insurance and market insurance may be complementary when self-insurance expenses do not affect much the probability distribution of large losses and the loading factor is high. This contrasts sharply with the conclusion of Ehrlich and Becker (1972) who establish the substitutability between self-insurance and market insurance when the cost of an accident is single-valued.
| Original language | English |
|---|---|
| Article number | 106180 |
| Journal | Journal of Economic Theory |
| Volume | 234 |
| DOIs | |
| Publication status | Published - 1 May 2026 |
Keywords
- Contracts
- Insurance
- Risk prevention
- Self-insurance
Fingerprint
Dive into the research topics of 'Self-insurance and market insurance substitutability: An established tenet reconsidered'. Together they form a unique fingerprint.Cite this
- APA
- Author
- BIBTEX
- Harvard
- Standard
- RIS
- Vancouver