Olivella, Pau; Schroyen, Fred - In: The Geneva Risk and Insurance Review 39 (2014) 1, pp. 90-130
We consider a population of individuals who differ in two dimensions, their risk type (expected loss) and their risk aversion, and solve for the profit-maximising menu of contracts that a monopolistic insurer puts out on the market. Our findings are threefold. First, it is never optimal to fully...