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. 
Back To Schedule
Tuesday, August 3 • 10:45am - 12:15pm
4B2 Optimal insurance under moral hazard in loss reduction

Sign up or log in to save this to your schedule, view media, leave feedback and see who's attending!

Feedback form is now closed.
Minha Lee, Sungkyunkwan University; Hangsuck Lee, Sungkyunkwan University; Jimin Hong, Soongsil University

This study investigates the optimal insurance when moral hazard exists in loss reduction. We identify that full insurance is optimal up to a limit and partial insurance is optimal above that limit. For a prudent individual, the indemnity schedule is convex, linear, or concave in the loss in which partial insurance is optimal, depending on the shapes of the utility and loss distribution. The optimal insurance may contain a deductible for large losses only when the indemnity schedule is convex. It may also include a fixed reimbursement when the schedule is convex or concave. When the loss distribution belongs to the linear exponential family, the indemnity schedule is concave under IARA and CARA, whereas it can be concave or convex under DARA.


Jean-Gabriel Lauzier

Bocconi University


Minha Lee

Sungkyunkwan University

Tuesday August 3, 2021 10:45am - 12:15pm EDT