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Optimal prevention and other risks in a two-period model

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  • Courbage, Christophe
  • Rey, Béatrice

Abstract

In this paper, we look at how the presence of other risks modifies the optimal level of prevention to protect against one risk. We carry out our analysis in a two-period framework and use various configurations of other risks defined either in the first or second period, as state-independent or state-dependent. We show that results differ depending on both the nature of the other risks and the properties of the utility function.

Suggested Citation

  • Courbage, Christophe & Rey, Béatrice, 2012. "Optimal prevention and other risks in a two-period model," Mathematical Social Sciences, Elsevier, vol. 63(3), pages 213-217.
    • Handle: RePEc:eee:matsoc:v:63:y:2012:i:3:p:213-217
    DOI: 10.1016/j.mathsocsci.2011.12.001
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    References listed on IDEAS

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