On the Theory of Rational Insurance Purchasing: A Note
- Full Text PDF
- Author(s): ERIC P. BRIYS, HENRI LOUBERGE
- Published: Apr 30, 2012
- Pages: 577-581
- DOI: 10.1111/j.1540-6261.1985.tb04974.x
The authors consider the optimal amount of insurance purchased by an individual who behaves according to the Hurwicz criterion of choice under uncertainty. Their results are compared with earlier results obtained in alternative frameworks (expected utility maximization and Savage's regret criterion). It is shown that a positive amount deductible is often suboptimal.