Insurance, self-protection, and the economics of terrorism

• 成果类型: Article
• 署名作者: Lakdawalla, D; Zanjani, G
• 署名单位: RAND Corporation; National Bureau of Economic Research; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2004.06.008
• 发表日期: 2005
• 页码: 1891-1905
• 关键词: insurance; TERRORISM; self-protection

摘要

This paper investigates the rationale for public intervention in the terrorism insurance market. It argues that government subsidies for terror insurance have the effect of discouraging self-protection and limiting the negative externalities associated with self-protection. Cautious self-protective behavior by a target can hurt public goods like national prestige if it is seen as giving in' to the terrorists, and may increase the loss probabilities faced by others by encouraging terrorists to substitute toward more vulnerable targets. We argue that these externalities in protection are essential for normative analysis of government intervention in insurance markets and may also explain why availability problems in this market have engendered much stronger government responses than similar problems in other catastrophe insurance markets. (c) 2004 Elsevier B.V. All rights reserved.