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Revenue risks, insurance, and the behavior of competitive firms

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Abstract

This paper explores some issues relating to a competitive firm's choice of the levels of output and insurance cover when faced with certain types of “revenue risks”. The analysis generalizes and extends existing results. In particular, we examine the implication, for the level of output and of insurance cover, of different risk attitudes of the firm under variable and fixed premium schemes. The possibility of using the premium schedule in, say, an export credit-guarantee scheme, as an instrument for stimulating the firm's output is noted.

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Author notes

  1. James L. Ford & Herrick C. Mpuku

    Present address: Department of Economics, University of Birmingham, B15 2TT, Birmingham, UK

  2. Prasanta K. Pattanaik

    Present address: Department of Economics, University of California, 92521, Riverside, CA, USA

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    1. James L. Ford
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    2. Herrick C. Mpuku
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    3. Prasanta K. Pattanaik
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    Ford, J.L., Mpuku, H.C. & Pattanaik, P.K. Revenue risks, insurance, and the behavior of competitive firms. Zeitschr. f. Nationalökonomie 64, 233–246 (1996). https://doi.org/10.1007/BF01250127

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    • DOI: https://doi.org/10.1007/BF01250127

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