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Handbook of the Economics of Risk and Uncertainty
book

Handbook of the Economics of Risk and Uncertainty

by Mark Machina, W. Kip Viscusi
November 2013
Beginner content levelBeginner
896 pages
35h 10m
English
North Holland
Content preview from Handbook of the Economics of Risk and Uncertainty
Howard Kunreuther and Erwann Michel-Kerjan
674
11.4 DEMAND FOR INSURANCE AGAINST CATASTROPHIC EVENTS
This section outlines a benchmark model of demand for insurance by consumers using
the concepts of expected utility [E(U)] theory and compares this normative theory with
two descriptive models. The section concludes by examining actual behavior by insurers
that does not conform to the E(U) and explains these anomalies using concepts from
behavioral economics.
11.4.1 A Benchmark Model of Demand
22
The benchmark model of demand is based on the assumption that insurance buyers
maximize their expected utility. Individuals purchase insurance because ...
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Publisher Resources

ISBN: 9780444536853