Self‐Insurance and Self‐Protection as Public Goods

20 Pages Posted: 24 Feb 2012

See all articles by Tim Lohse

Tim Lohse

Berlin School of Economics and Law; Max Planck Institute for Tax Law and Public Finance

Julio R. Robledo

Ruhr Universität Bochum

Ulrich Schmidt

University of Kiel - Institute of Economics

Date Written: March 2012

Abstract

Many public goods provide utility by insuring against hazardous events. Those public goods can have self‐insurance and self‐protection character. For both situations we analyze the efficient public provision level and the provision level resulting from Nash behavior in a private provision game. We consider the interaction of public goods as insurance devices with market insurance. The availability of market insurance reduces the provision level of the public good for both public and private provision, regardless of whether we consider self‐insurance or self‐protection. Moreover, we show that Nash behavior has always a larger impact than the availability of market insurance.

Suggested Citation

Lohse, Tim and Robledo, Julio R. and Schmidt, Ulrich, Self‐Insurance and Self‐Protection as Public Goods (March 2012). Journal of Risk and Insurance, Vol. 79, Issue 1, pp. 57-76, 2012. Available at SSRN: https://ssrn.com/abstract=2010345 or http://dx.doi.org/10.1111/j.1539-6975.2010.01391.x

Tim Lohse (Contact Author)

Berlin School of Economics and Law ( email )

Badensche Strasse 50-51
Berlin, D-10825
Germany

HOME PAGE: http://www.hwr-berlin.de/en/prof/tim-lohse

Max Planck Institute for Tax Law and Public Finance

Marstallplatz 1
Munich, 80539
Germany

HOME PAGE: http://www.tax.mpg.de/en/pub/public_economics/research_affiliates/tim_lohse.cfm

Julio R. Robledo

Ruhr Universität Bochum ( email )

University Bochum GC 3/150
Bochum, 44780
Germany

Ulrich Schmidt

University of Kiel - Institute of Economics ( email )

Olshausenstrasse 40
24098 Kiel, 24098
Germany

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