Self-Protection and Insurance with Interdependencies

Alexander Muermann, Howard Kunreuther

We study optimal investment in self-protection of insured individuals when they face interdependencies in the form of potential contamination from others. If individuals cannot coordinate their actions, then the positive externality of investing in self-protection implies that, in equilibrium, individuals underinvest in self-protection. Limiting insurance coverage through deductibles can partially internalize this externality and thereby improve individual and social welfare

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Year of publication:	January 2007
Authors:	Muermann, Alexander
Other Persons:	Kunreuther, Howard (contributor)
Institutions:	National Bureau of Economic Research (contributor)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Spieltheorie \| Game theory \| Versicherungsökonomik \| Economics of insurance \| Entscheidung unter Risiko \| Decision under risk \| Haftung \| Liability \| Nachfrageinterdependenz \| Interdependent preferences \| Versicherungsschaden \| Insured loss

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Extent:	1 Online-Ressource
Series:	NBER working paper series ; no. w12827
Type of publication:	Book / Working Paper
Language:	English
Notes:	Mode of access: World Wide Web System requirements: Adobe [Acrobat] Reader required for PDF files Hardcopy version available to institutional subscribers.
Other identifiers:	10.3386/w12827 [DOI]
Source:	ECONIS - Online Catalogue of the ZBW

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