top of page
Rechercher
Photo du rédacteurHélène Dufour

Some remarks on the effect of risk sharing and diversification for infinite mean risks

Insurance typically benefits risk-averse individuals by pooling finite-mean risks. However, with infinite-mean distributions (e.g., Pareto, Fréchet), risk sharing can backfire, creating a "nondiversification trap." This applies to highly skewed distributions like Cauchy or catastrophic risks with infinite losses. Open questions remain about these complex scenarios.


1 vue0 commentaire

Posts récents

Voir tout

Commentaires


bottom of page