In the basic model of insurance, Income is the only output into a persons utility. This is obviously not realistic. If we relax our our assumption that utility is determined only by income levels can any assurance contract provide full protection against the possibility of becoming severely ill? Give examples of risks associated with becoming sick that are not typically covered by formal health insurance. Can you think of ways that people informally insure against these uninsurable risks?

In the basic model of insurance, Income is the only output into a persons utility. This is obviously not realistic. If we relax our our assumption that utility is determined only by income levels can any assurance contract provide full protection against the possibility of becoming severely ill? Give examples of risks associated with becoming sick that are not typically covered by formal health insurance. Can you think of ways that people informally insure against these uninsurable risks?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section: Chapter Questions

Problem 55P

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Similar questions

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