Although financial pricing models imply that profits of property- liability insurance firms should conform to an unpredictable time series process, cycles are widely reported. Some controversy exists as to whether the "underwriting cycle" is a mere accounting artifact or whether it has real...

In this paper, we examine second-best efficient allocations of risk when some forms of incompleteness are introduced in risk- sharing contracts. In the first model, there are two independent sources of risk, but risk-sharing contracts can be made contingent to only one of the two sources. We...

This article complements the earlier work by Mayers and Smith (1987) and Schnabel and Roumi (1989) which showed that a property insurance contract could be used to bond subsequent corporate investment decisions. Although these models suggest one possible approach to solving the underinvestment...

In the standard portfolio problem, a shift in the distribution of the risky asset is ``portfolio-dominated'' if it reduces the demand for the risky asset by all risk-averse agents, whatever the riskfree rate. We show that the condition obtained by Landsberger and Meilijson [1993] (while...

Recent scholarship emphasizes the importance of governments' abilities to impose losses on powerful groups, and suggests that loss imposition is more problematic under separation of powers systems. Yet the empirical evidence for this judgement is thin. In this article I attempt to obtain more...

We examine in this paper a new natural restriction on utility functions, namely that an undesirable risk can never be made desirable by the presence of an independent, unfair risk. This concept is called weak properness. It generalizes the concept of properness (individually undesirable,...