In this article, we generalize the Hoy and Robson (1981) analysis and provide a necessary and sufficient condition for insurance not to be a Giffen good. The condition gives a bound for the variation of absolute risk aversion that permits the wealth effect to be always dominated by the...

More than thirty years ago, Charnes, Cooper and Schinnar (1976) established an enlightening contact between economic production functions (EPFs) -- a cornerstone of neoclassical economics -- and information theory, showing how a generalization of the Cobb-Douglas production function encodes...

In this paper we develop a contingent claim model to evaluate the equity and liabilities of a life insurance company. The limited liability of shareholders is explicitly modelled. We focus on a specific type of life insurance policy–namely, the profit-sharing policy. In this policy, the...