Non-Expected Utility and Risk Management: A Special Issue of by Christian Gollier (auth.), Christian Gollier, Mark Machina

By Christian Gollier (auth.), Christian Gollier, Mark Machina (eds.)

Expected software presents basic, testable homes of the optimal habit that are supposed to be displayed via risk-averse participants in dicy judgements. concurrently, given the lifestyles of paradoxes below the predicted application paradigm, anticipated software can purely be considered as an approximation of exact habit. A extra lifelike version is required. this can be really real while treating attitudes towards small likelihood occasions: the traditional scenario for insurable dangers.
Non-Expected application and possibility Management examines even if the present ends up in assurance economics are strong to extra basic types of habit less than risk.

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1968]: "The Theory of Syndicates;' Econometrica, 36, 119-132. 50 MARK J. MACIDNA YAARI, M. [1965]: "Convexity in the Theory of Choice Under Risk," Quarterly Journal of Economics, 79, 278-290. YAARI, M. [1969]: "Some Remarks on Measures of Risk Aversion and on Their Uses," Journal of Economic Theory, 1, 315-329. Reprinted in Diamond and Rothschild [1989]. YAARI, M. [1987]: "The Dual Theory of Choice Under Risk," Econometrica, 55, 95-115. The Geneva Papers on Risk and Insurance Theory, 20: 51-56 (1995) © 1995 The Geneva Association Non-Expected Utility and the Robustness of the Classical Insurance Paradigm: Discussion EDI KARNI Department of Economics, The Johns Hopkins University, Baltimore, MD 21218-2685 Abstract This paper discusses some aspects of the robustness of the classical insurance paradigm with respect to departures from the independence axiom of expected utility theory.

BORCH, K. [1960]: "The Safety Loading of Reinsurance Premiums," Skandinavisk Aktuarietidskrijt, 163-184. Reprinted in BOTCh [1990]. BORCH, K. [1961]: "The Utility Concept Applied to the Theory of Insurance;' Astin But/etin, 1, 245-255. Reprinted in BOTCh [1990]. BORCH, K. [1962]: "Equilibrium in a Reinsurance Market," Econometrica, 30, 424-444. Reprinted in BOTCh [1990] and in Dionne and Harrington [1992]. BORCH, K. [1990]: Economics ojlnsUTUllCe. North Holland, Amsterdam. (Completed by K. Aase and A.

NON-EXPECTED UTILITY: DISCUSSION 55 3. " The identification of results that are nonrobust is of particular interest since they may serve to test the alternative theories. An inherent aspect of expected-utility theory that requires special consideration in non-expected-utility theories is dynamic consistency. 9 It will be interesting, therefore, to find out if there are insurance-market phenomena, possibly involving sequential insurance decisions, that may shed some light on the issue of dynamic consistency.

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