We develop a model which accounts for the observed equity premium and average risk free rate, without implying counterfactually high risk aversion. The model also does well in accounting for business cycle phenomena.

An individual confronts multiple risks she insures by independent specialized monopolies. Though the individual does not act strategically, the indirect competition between monopolies can leave her with part of the surplus. This is the case if her global risk premium is lower than the sum of...

This paper studies optimal property insurance in the presence of equity risk and conversion risk. Equity risk is randomness of the value of a property. It tends to raise demand for conventional insurance on the property effectively increasing the risk aversion of the property owner. In contrast,...

In a previous paper, Abouda and Chateauneuf proved that for RDEU maximizing MM with non-increasing marginal utility, positivity of the bid-ask spread can be identified with a very weak form of risk aversion SMRA. We perform here a more thorough study of SMRA, firstly in a general setting, and...