Deductible insurance and production: A comment

✍ Scribed by Christian Gollier

• Publisher: Elsevier Science
• Year: 1996
• Tongue: English
• Weight: 286 KB
• Volume: 19
• Category: Article
• ISSN: 0167-6687
• DOI: 10.1016/s0167-6687(96)00008-x

✦ Synopsis

We consider a risk-averse firm facing output price uncertainty. Contrary to Machnes (1995), we show that a fair deductible insurance does not need to increase the optimal level of output. We provide some sufficient conditions to obtain an unambiguous comparative static effect.