The Economics of Risk and Insurance

Written for advanced undergraduate and masters level courses, this book builds from a base of asymmetric information issues to discuss a wide array of topics and is illustrated with some timely examples. Covers diverse issues such as risk aversion, expected utility, and moral hazard within the pure theory of insurance Provides a clear exposition of the necessary mathematics, a feature which cannot be found in readers on the topic Utilizes an undergraduate economics major level of math Uses the simplest economic models possible to keep the text intuitive Introduces more mathematically complex techniques such as basic optimization for students wishing to 'go further' in their analysis

0. Introduction. Part I: Fundamentals of Insurance. 1. Risk and Expected Utility. 2. Risk Aversion and Riskiness. 3. Principles of Insurance: Risk Sharing and Transfer. Part II: Demand for Insurance and Insurance Contract. 4. Risk Aversion and Insurance. 5. Corporate Insurance and Risk Management. 6. Liability and Insurance. Part III: Information and Insurance Contract. 7. Basic Adverse Selection Models. 8. Advanced Topics in Adverse Selection. 9. Moral Hazard. 10. Ex Post Moral Hazard and Fraud. Part IV: Insurance Market. 11. Insurer Organization. 12. Competition in the Insurance Market. 13. Insurance Cycle and Capacity. Part V: Insurer Management. 14. Insurance Distribution Systems. 15. Insurance Pricing.