Konrad, Kai A.; Skaperdas, Stergios
Self-insurance and self-protection: A nonexpected utility analysis.
In: The GENEVA Papers on Risk and Insurance Theory, Vol. 18, No. 2: pp. 131-146
Full text not available from 'Open Access LMU'.
This paper studies the comparative statics of self-insurance and self-protection for individuals with rank-dependent expected utility preferences. In particular, proportional wealth risks, background risk, and limited liability are considered. Limited liability has a major impact on self-insurance and self-protection. It can reverse seemingly robust comparative static results for the case of self-insurance and can eliminate some puzzling ambiguities for the case of self-protection. © 1993 The Geneva Association.