Title: Insurance bargaining under risk aversion
Authors: Viaene, Stijn ×
Veugelers, Reinhilde
Dedene, Guido #
Issue Date: Mar-2002
Series Title: Economic modelling vol:19 issue:2 pages:245-259
Abstract: Based on the setting defined in a paper by Kihlstrom and Roth (1982), we consider a 2-person insurance bargaining game in which a risk-averse client is bargaining with an insurer. Existing literature using an axiomatic Nash cooperative bargaining game shows that risk aversion constitutes a disadvantage for the client. Essentially the same result will in general arise in a non-co-operative bilateral bargaining game of complete and perfect information. We complement the discussion on the impact of risk aversion by constructing a non-co-operative alternating offer bargaining game for the insurance market where we account for 'risk aversion' of the players through the discount factor.
ISSN: 0264-9993
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center for Management Informatics (LIRIS), Leuven
× corresponding author
# (joint) last author

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