Agriculture is inherently risky. Drought is a particularly troublesome hazard that has a documented adverse impact on agricultural development. A long history of decision-support tools have been developed to try and help farmers or policy makers manage risk. We offer site-specific drought insurance methodology as a significant addition to this process. Drought insurance works by encapsulating t...

This paper examines qualitative properties of efficient insurance contracts in the presence of background risk. In order to get results for all strictly risk averse expected utility maximizers, the concept of “stochastic increasingness” is used. Different assumptions on the stochastic dependence between the insurable and uninsurable risk lead to different qualitative properties of the efficient...

This article examines the interaction between the demand for deductible insurance and the demand for the asset that can be insured. A model where the decision-maker can choose both the insurance level and the amount of the risky asset to hold in the portfolio is used. Allowing simultaneous determination of the demand for an asset and the level of the deductible alters the comparative statics of...

Numerous industry studies discuss the economic effects of potentially extreme cyber incidents, with considerable variation in applied methodology and estimated costs. We implement a dynamic inoperability input–output model that allows consistent analysis comparison impacts resulting from six widely discussed risk scenarios. Our accounts for frequently omitted qualitative context scenarios to be...

This paper studies asset pricing and labor market dynamics when idiosyncratic risk to human capital is not fully insurable. Firms use long‐term contracts provide insurance workers, but neither side can commit; furthermore, owing costly unobservable retention effort, worker‐firm relationships have endogenous durations. Uninsured tail in earnings arises as a part of an optimal risk‐sharing scheme...

In 2006, Huang, Susilo, Mu and Zhang proposed the concept of restricted universal designated verifier signatures while Klonowski, Kubiak, Kutylowski and Lauks proposed independently the dual primitive of dedicated signatures. In both notions, a signature holder can convince one or more verifiers of his knowledge of a digital signature, but cannot exploit this knowledge without being punished fo...

This paper examines how the two fundamental principles in risk allocation, i.e., the mutuality principle and the transfer principle, can be implemented in order to manage efficiently catastrophic risk. From a decomposition of the insurable loss into idiosyncratic and systemic components, we show that the systemic risk is first filtered through a participating policy with a variable premium base...

Risk-sharing in insurance is analyzed, with a view towards explaining the prevalence of deductibles. First we introduce, in a modern setting, the main concepts of the theory of risk-sharing in a group of agents. This theory we apply to the risk-sharing problem between an insurer and an insurance customer. We motivate the development through simple examples, illustrating some of the subtle point...