Functional Form Problems in Modeling Insurance and Gambling
Defining the outputs of the property insurance and gambling sectors of an economy has proved to be a difficult problem for national income accountants. It is well known that the traditional expected-utility model is not consistent with economic agents fully insuring their property. Thus the present paper adapts existing non-expectedutility theories to yield useful measures of output for the property insurance and gambling sectors.
Key wordsnon-expected utility gambling insurance functional form problems risky activities in the national accounts state contingent commodities
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