We compare the demand for insurance under state-dependent and state-independent preferences when allowing for positive premium loading and continuous state space. We show that monotonicity of marginal utility across states is not sufficient to yield unambiguous comparative results--as it is under a fair premium. Nevertheless, unambiguous results can be derived for a specified set of state-independent preferences if both marginal utility and absolute degree of risk aversion are monotonic across states.
Zeitraum
21 Sept. 2009 → 23 Sept. 2009
Ereignistitel
Seminar of the European Group of Risk and Insurance Economists 2009