Earticle

초록

영어

This study develops a duopoly model with quality and price competition, and investigates the corporate demand for insurance. Our model predicts asymmetric strategic effects of insurance for two firms with different qualities, because the increases in the quality of each firm have opposite effects on the intensity of price competition. We show that lowquality firm has positive strategic effect of insurance, and might purchase insurance, whereas high-quality firm has negative strategic effect of insurance and never purchases insurance if firms are risk-neutral. When firms are risk-averse, however, high-quality firm might also purchase insurance if the cost of risk is sufficiently large, so that the benefit of insurance exceeds the sum of the strategic effect and the cost of insurance. We show that the availability of insurance might raise the quality levels of both firms.

목차

Abstract
1. Introduction
2. Model
3. Quality and price competition and corporate demand for insurance
3.1 Risk-neutral case (𝛾𝛾 = 0)
3.2 Risk-averse case (𝛾𝛾 > 0)
4. Discussion
4.1 The price equilibrium
4.2 The choice of quality
4.3 The choice of the insurance coverage
5. Conclusion
Appendix
References

키워드

저자

• Kyungsun Kim [ Institute of Finance and Banking, Seoul National University Business School ]
• Jimin Hong [ Department of Statistics and Actuarial Science, Soongsil University ]
• S. Hun Seog [ Seoul National University Business School ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330