The Theoretical and Empirical Studies of Insurance Bargaining
Date Issued
2014
Date
2014
Author(s)
Huang, Yi-Chieh
Abstract
This dissertation, which is divided into two parts, theoretically and empirically investigates effects of ambiguity, risk aversion, and bargaining power on outcomes of insurance bargaining. Specifically, the first part of dissertation “A Cooperative Insurance Bargaining Model with Ambiguity” theoretically analyzes how the optimal insurance contract will be affected by an increase in ambiguity aversion and an increase in ambiguity by studying a cooperative insurance bargaining game with a risk-neutral
insurer and a risk-and-ambiguity-averse client. I first show that full coverage is optimal in the presence of ambiguity and that the optimal premium becomes higher because of
the introduction of ambiguity. Subsequently, both an increase in ambiguity aversion and an increase in ambiguity are found to raise the optimal premium. The second part of
dissertation “Who Obtains more Discount on Insurance Premiums?” uses the data on Taiwanese auto liability insurance for property damage to empirically examine whether
an insured’s risk aversion and bargaining power are associated with his/her premium discount ratios. After controlling insured risks and underwriting variables, the results suggest that, on average, both more risk-averse insured (represented by the insured with multiple types of coverage) and the insured with weaker bargaining power (represented by the insured with claim records) obtain significantly lower premium discount ratios.
Subjects
保險議價
合作議價
模糊
模糊趨避
風險趨避
議價能力
保費折扣
Type
thesis
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