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Is it really possible to control for the downside risk when the market environment is in constant evolution? If so … variance and correlation terms are properly taken into account, downside risk can be mitigated without compromising long …
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We study adverse selection on annuity markets in a general-equilibrium model of the closed economy. Agents differ in their health type and invest their assets on the annuity market. Without informational asymmetries themodel features a separating equilibrium in which each agent obtains an...
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external effects. Individual agents differ in terms of their mortality profile. At birth, nature assigns a health status to … longevity risk, agents want to annuitize their wealth conform the classic result by Yaari (1965). In the first-best case with …
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disaster risk management. It further demonstrates that preferences for liquidity lead to less consumption. Moreover, from … policymakers to become less incentivized in mitigating disaster risk and leads them underestimate the welfare benefit of policy …
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