Theory and Decision

, Volume 32, Issue 2, pp 203–207 | Cite as

Insurance buying gamblers

  • George G. Szpiro


The puzzling coincidence of gambling and insurance has often been analysed by taking recourse to utility functions with convex and concave regions. In this paper we show that it may be optimal for utility maximizing risk seekers to engage in insurance and gambling activities simultaneously. A possible reason for this behavior is that these individuals try to take advantage of a moral hazard situation.


Insurance gambling moral hazard HARA utility 


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Copyright information

© Kluwer Academic Publishers 1992

Authors and Affiliations

  • George G. Szpiro
    • 1
  1. 1.Hebrew University of JerusalemJerusalemIsrael

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