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Should we do more when we know less? The effect of technology risk on optimal effort
Recurso electrónico / Electronic resource
Collection: Articles
Title: Should we do more when we know less? The effect of technology risk on optimal effort / Lu Li, Richard PeterAuthor: Li, Lu ‌
Notes: Sumario: Technology risk arises when the effectiveness of self-insurance and self-protection activities depends on exogenous factors or is only imperfectly known. It affects optimal behavior via a preference channel and a technology channel. In this paper, we identify conditions for unambiguous comparative statics with respect to the presence of, as well as various stochastic changes in technology risk. These conditions involve prudence, relative risk aversion, relative prudence, and several new measures of mitigation efficacy. We highlight cases where technology risk raises the optimal level of effort, consistent with the precautionary principle. We discuss several applications of our results.Related records: En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/09/2021 Volumen 88 Número 3 - septiembre 2021 , p. 695-725Materia / lugar / evento: Riesgo tecnológico ‌Cibernética ‌Ciberriesgos ‌Autoseguro ‌Other categories: 922.13
Rights: In Copyright (InC)
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