Dynamic consistency of insurance contracts under enforcement by exclusion (Q1109667)
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scientific article; zbMATH DE number 4070592
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| English | Dynamic consistency of insurance contracts under enforcement by exclusion |
scientific article; zbMATH DE number 4070592 |
Statements
Dynamic consistency of insurance contracts under enforcement by exclusion (English)
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1989
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An insurance institution offsets individual income shocks with a contract that takes advantage of the cross-sectional heterogeneity of the shocks. Individuals with temporarily high incomes will wish to avoid the redistributive taxes imposed by the contract; these individuals are permitted to defect, but at the cost of forsaking all future benefits. Operator methods like those used by \textit{Ch. Whiteman} [ibid. 9, 225-240 (1985; Zbl 0655.90012)] characterize the conditions under which on defection will occur. If the contract is identified with redistributive government programs, the central conclusion is that such contracts will be associated with high-income, advanced economies.
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dynamic consistency
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insurance contracts
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individual income shocks
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0.754247784614563
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0.7502567172050476
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0.7122741937637329
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0.710170328617096
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0.7088480591773987
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