when faced with ambiguous probabilities and uncertain losses for a well-specified risk.
Underwriters of primary insurance companies and reinsurance firms were surveyed
about the prices they would charge to insure a factory against property damage from a
severe earthquake under the following four different cases:
•CaseOne:well-specifiedprobabilities(p) and known losses (L);
•CaseTwo:ambiguousprobabilities(Ap) and known losses (L);
•CaseThree:well-specifiedprobabilities(p) and uncertain losses (UL);
•CaseFour:ambiguousprobabilities(Ap) and uncertain losses (UL).
For the nonambiguous ...
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