Abstract
A simple risky situation is studied in the framework of consumption theory. Saving is shown to be a substitute to insurance. Two new concepts, riskbearing budget and effective risk coverage, are introduced in order to give a more accurate insight into the optimal risk-bearing decision. The effect of a variation in current consumption and in wealth upon tile optimal insurance coverage is analyzed.
Volume
8:3
Page
342-358
Year
1975
Categories
Actuarial Applications and Methodologies
Enterprise Risk Management
Risk Categories
Financial and Statistical Methods
Risk Pricing and Risk Evaluation Models
Utility Theory
Publications
ASTIN Bulletin
