with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then … standard functional form restrictions ensure that individual objective functions are optimized by an effort and insurance … combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly …

Using a model with constant relative risk-aversion preferences, endogenous labor supply and partial insurance against … idiosyncratic wage risk, we provide an analytical characterization of three welfare effects: (a) the welfare effect of a rise in … wage dispersion, (b) the welfare gain from completing markets, and (c) the welfare effect from eliminating risk. Our …

Demand for insurance can be driven by high risk aversion or high risk. We show how to separately identify risk … preferences and risk types using only choices from menus of insurance plans. Our revealed preference approach does not rely on … in insurance plans, offered separately to random cross-sections or offered as part of the same menu to one cross …

when risk is involved, even when full information is available. A simple normative analysis of decisions about insurance …Consumers face many decisions involving risk, yet some researchers claim that consumers cannot make rational decisions … consumers to choose insurance policies with higher deductibles. Possible computer expert systems to help consumers make …

with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then … standard functional formrestrictions ensure that individual objective functions are optimized by an effort and insurance … combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly …