Choosing a lawyer as a special case of self-insurance-cum-protection

• Autorzy: Dudziński P.

Identyfikatory

DOI

10.14708/ma.v41i2.467

Warianty tytułu

PL

Wybór prawnika jako szczególny przypadek samoubezpieczenia z ochroną

• Języki publikacji: EN

Abstrakty

EN

We consider the problem of choosing a lawyer as a particular case of selfinsurance- cum-protection (SICP) when the lawyer’s costs are covered in the case of victory. This problem was introduced by Sevi and Yafil (2005) in the context of selfprotection (SP), with the assumption that the size of a loss does not depend on the level of effort (expenditure on a lawyer). In this paper we drop that assumption and our model considers the possibility that both the loss and probability of incurring a loss depend on effort. We compare the optimal effort in our case with the standard one and prove that, according to the modified model of SICP, repayment is a good incentive to invest more. We also show that, unlike in the standard cases of SP and SICP, the level of effort is monotone in the level of risk aversion. We prove that, according to our model, decreasing absolute risk aversion (DARA) implies that a lawyer’s service is a normal good, which is intuitive. We show that for a certain type of increase in risk aversion, the reimbursement effect is stronger than the risk aversion effect. For other changes in risk aversion, there is a probability threshold such that if the probability of a loss is below that level, then the risk-aversion effect prevails. For higher initial probabilities, the reimbursement effect is stronger.

PL

Analizujemy decyzje o wyborze prawnika jako szczególnym przypadku samoubezpieczenia z ochroną, gdy koszt prawnika zostanie spłacony w przypadku wygrania procesu. Problem został wprowadzony przez Sevi i Yafil(2005) w kontekście obrony, która wymaga założenia, że wielkość strat nie zależy od wysiłku (poziom wydatków na adwokata ).

Słowa kluczowe

EN

self-insurance-cum protection; risk aversion; reimbursement

PL

samoubezpieczenia; niechęć do ryzyka; zwrot kosztów

• Wydawca: Polskie Towarzystwo Matematyczne
• Czasopismo: Mathematica Applicanda
• Rocznik: 2013
• Tom: Vol. 41, No. 2
• Strony: 171--184
• Opis fizyczny: Bibliogr. 12 poz.

Twórcy

autor

Dudziński P.

• University of Gdańsk Department MFI, Institute of Mathematics, ul. Wita Stwosza 57, 80-952 Gdańsk - Oliwa , Poland

Bibliografia

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• [12] B. Sevi, F. Yafil, A special case of self-protection: The choice of a lawyer, Economics Bulletin 4(6) (2005), 1-8.