Research on the Incompletely Insuring Condition for Risk-Seeking Insureds

摘要

Because the incompletely insuring condition deduced from risk-averse insureds cannot stop the insurance crisis happening, there is a need to restudy the incompletely insuring condition under the influence of adverse selection in insurance market. First of all, this paper demonstrated the bilateral information asymmetry on the insurance market. Following that, through the application of Karush-Kuhn-Tucker Theorem, this paper deduced the incompletely insuring condition newly. Finally, this paper draws the conclusion that insurance company should control the compensation amount through the design of insurance contract.