Optimality of deductible: a characterization, with application to Yaari’s dual theory

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Theory and Decision 92 (3-4):569-580 (2022)
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Abstract

The main purpose of this paper is to show that left-monotone risk aversion, a meaningful refinement of strong risk aversion, characterizes decision makers for whom deductible insurance is optimal. A second goal is to prove that the deductible’s computation is particularly tractable in the case of Yaari’s decision makers.

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10.1007/s11238-022-09880-1

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Prospect Theory: For Risk and Ambiguity.Peter P. Wakker - 2010 - Cambridge University Press.

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