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Article: A note on deductible insurance and production

TitleA note on deductible insurance and production
Authors
Machnes, YWong, KP
KeywordsDeductible insurance
Production
Prudence
Issue Date2003
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=1554-964X
Citation
Geneva Papers On Risk And Insurance Theory, 2003, v. 28 n. 1, p. 73-80 How to Cite?
DOI: http://dx.doi.org/10.1023/A:1022147932059
AbstractThis paper examines the optimal production decision of a firm facing revenue risk. We show that the purchase of actuarially fair deductible insurance unambiguously induces the firm to produce more if the firm is not only risk averse but also prudent. If the firm's perferences satisfy constant absolute risk aversion, buying actuarially unfair deductible insurance unambiguously enhances production should the positive loading factor be sufficiently small. When there are moral hazard problems in that the firm's output cannot be contracted upon, we show that the purchase of actuarially fair deductible insurance unambiguously induces the firm to produce more if the firm's utility function is quadratic.
Persistent Identifierhttp://hdl.handle.net/10722/85581
ISSN
0926-4957
ISI Accession Number ID
WOS:000180652600005
References
References in Scopus

 

DC FieldValueLanguage
dc.contributor.authorMachnes, Yen_HK
dc.contributor.authorWong, KPen_HK
dc.date.accessioned2010-09-06T09:06:49Z-
dc.date.available2010-09-06T09:06:49Z-
dc.date.issued2003en_HK
dc.identifier.citationGeneva Papers On Risk And Insurance Theory, 2003, v. 28 n. 1, p. 73-80en_HK
dc.identifier.issn0926-4957en_HK
dc.identifier.urihttp://hdl.handle.net/10722/85581-
dc.description.abstractThis paper examines the optimal production decision of a firm facing revenue risk. We show that the purchase of actuarially fair deductible insurance unambiguously induces the firm to produce more if the firm is not only risk averse but also prudent. If the firm's perferences satisfy constant absolute risk aversion, buying actuarially unfair deductible insurance unambiguously enhances production should the positive loading factor be sufficiently small. When there are moral hazard problems in that the firm's output cannot be contracted upon, we show that the purchase of actuarially fair deductible insurance unambiguously induces the firm to produce more if the firm's utility function is quadratic.en_HK
dc.languageengen_HK
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=1554-964Xen_HK
dc.relation.ispartofGENEVA Papers on Risk and Insurance Theoryen_HK
dc.subjectDeductible insuranceen_HK
dc.subjectProductionen_HK
dc.subjectPrudenceen_HK
dc.titleA note on deductible insurance and productionen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0926-4957&volume=28&spage=73&epage=80&date=2003&atitle=A+Note+on+Deductible+Insurance+and+Productionen_HK
dc.identifier.emailWong, KP: kpwongc@hkucc.hku.hken_HK
dc.identifier.authorityWong, KP=rp01112en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.1023/A:1022147932059en_HK
dc.identifier.scopuseid_2-s2.0-4043098306en_HK
dc.identifier.hkuros81811en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-4043098306&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume28en_HK
dc.identifier.issue1en_HK
dc.identifier.spage73en_HK
dc.identifier.epage80en_HK
dc.identifier.isiWOS:000180652600005-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridMachnes, Y=6603229219en_HK
dc.identifier.scopusauthoridWong, KP=7404759417en_HK
dc.identifier.issnl0926-4957-

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