Braun, Helge; Koeniger, Winfried - In: The Geneva Papers on Risk and Insurance Theory 32 (2007) 1, pp. 61-90
Durables like cars or houses are a substantial component in the balance sheets of households. These durables are exposed to risk and can be insured in the market. We build a dynamic model in which agents have three possibilities to cope with the risk exposure of the durable stock: (i) purchase...