National Self-Insurance and Self-Protection Against Adversity: Bureaucratic Management of Security and Moral Hazard
Toshihiro Ihori and Martin McGuire ,
( 11 )
Economics of Governance

This paper extends existing analyses of self-insurance and self-protection—distinctions first made by Ehrlich and Becker (J Polit Econ 80:623–648, 1972)—that countries may implement at a national level in pursuit of their security. We show that, when no market insurance is available, self-insurance alone raises important new issues as to the definition of “fair pricing” and as to the relations between pricing, optimization, risk aversion, and inferiority that are significantly different from standard, conventional market analysis.

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