Welcome to the ARIA 2021 Annual Meeting Agenda App. You are seeing this in simple view. Click on any session to see Presenters, Discussants and a Session Description. Click on Presenters to find a single presenter and their sessions. If you find an error, please email gphillips@aria.org. Registrants have been added and will continue to be updated until 7/29/21 when registration closes. Zoom links will be shared directly with all participants two days prior to the conference. Please make notifications@sched.com a "safe sender" in your email system. We will be sending messages throughout the conference through this medium.
Kyungsun Kim, Institute of Finance and Banking, Seoul National University; S. Hun Seog, Seoul National University Business School; Jimin Hong, Soongsil University
This study develops a duopoly model with quality and price competition, and investigate the corporate demand for insurance. Our model predicts asymmetric strategic effects of insurance for two firms with different qualities, because the increases in the quality of each firm have opposite effects on the intensity of price competition. We show that low-quality firm has positive strategic effect of insurance, and might purchase insurance, whereas high-quality firm has negative strategic effect of insurance and never purchases insurance if firms are risk-neutral. When firms are risk-averse, however, high-quality firm might also purchase insurance if the cost of risk is sufficiently large, so that the benefit of insurance exceeds the sum of the strategic effect and the cost of insurance. We show that the availability of insurance might raise the quality levels of both firms.
