The course covers the economics of risk and insurance, in particular the following topics will be discussed: 2) individual decision making under risk 3) models of insurance demand, risk sharing, insurance supply 4) information issues in insurance markets 5) advanced topics in microeconomics and behavioral economics 5) the macroeconomic role of insurers and insurance regulation
The course introduces students to basic microeconomic models of risk attitudes and highlight the role insurance can – or cannot – play for individuals facing risks.
Everyday, we take decisions involving risks. These decisions are driven by our perception of and our appetite for risk. Insurance plays a significant role in people's risk-management strategies.
In the first part of this lecture, we discuss a normative decision concept, Expected Utility theory, and compare it with empirically observed behaviour.
Students then learn about the rationale for individuals to purchase insurance, and for companies to offer it. We derive the optimal level of insurance demand and discuss how it depends on our model's underlying assumptions.
We then discuss the consequences of information asymmetries in insurance markets and the consequences for insurance supply.
Finally, we discuss refinements in decision theory that help account for observed behaviours that don't fit with the basic models of microeconomic theory. For example, we'll explore how behavioural economics can be leveraged by the insurance industry.
- Zweifel, P., & Eisen, R. (2012). Insurance Economics. Springer. - Handbook of the Economics of Risk and Uncertainty, Volume1;
- Dionne, G. (Ed.). (2013). Handbook of Insurance (2nd ed.). Springer.
References will be given on a topic-by-topic basis during the course.
Konzepte und Theorien
Information zur Leistungskontrolle (gültig bis die Lerneinheit neu gelesen wird)