Ambiguity, ambiguity aversion and the coverage of uncertain risks : the case of the insurer
Ambiguity aversion is defined as an aversion to any mean-preserving spread in the probability space. Using the Smooth Ambiguity Model proposed by Klibanoff, Marinacci and Mukerji (2005), we show that ambiguity aversion results in a reduction in the proportion of insurance coverage offered by an insu...
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| Format: | Dissertation |
| Language: | English |
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University of Cape Town
2014
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| Online Access: | http://hdl.handle.net/11427/10215 |