This chapter points out the obstacles to analyzing the demand for insurance by using the traditional stochastic dominance rules when the insurance premium is actuarially unfair. We further review the almost stochastic dominance rules and show how to employ them to examine the demand for insurance. Some directions for future studies in this line of research are provided.

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Stochastic Dominance and the Demand for Insurance

  • Rachel J. Huang,
  • Larry Y. Tzeng

摘要

This chapter points out the obstacles to analyzing the demand for insurance by using the traditional stochastic dominance rules when the insurance premium is actuarially unfair. We further review the almost stochastic dominance rules and show how to employ them to examine the demand for insurance. Some directions for future studies in this line of research are provided.