A Compromise Solution for claims problems

A Compromise Solution for claims problems

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Article ID: iaor19972023
Country: Netherlands
Volume: 73
Issue: 1
Start Page Number: 39
End Page Number: 43
Publication Date: Feb 1994
Journal: European Journal of Operational Research
Authors:
Keywords: insurance
Abstract:

The purpose of this paper is to axiomatically characterize a Compromise Solution for claims problems which satisfies invariance under affine utility transformations. The more well-known solutions for claims problems do not satisfy this property. This is a major deficiency of the latter class of solutions, as they fail to predict appropriate responsiveness to risk aversion by one’s opponents. The present solution overcomes this deficiency.

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