Koehl, Pierre-François; Rochet, Jean-Charles - In: The Geneva Risk and Insurance Review 19 (1994) 2, pp. 101-117
We introduce profit taxation in Borch's [1962] model of a competitive insurance market. We analyze the impact of taxation on equilibrium prices and characterize the cases where optimal risk sharing is preserved. In the case of Constant Relative Risk Aversion (CRRA) utility functions, this...