英文摘要 |
This paper constructs a self-insurance model in the presence of consumption externality. We have two major findings. First, if an individual is jealous and risk averse, then the equilibrium level of self-insurance will be lower than the social optimum. This result is significantly different from that of Dupor and Liu (2003). Second, when the marginal cost of public funds (MCPF) equals one, the government should tax (subsidize) losses or subsidize (tax) self-insurance if consumers are under- (over-) insured. However, when the MCPF is greater than one, the government should tax losses if consumers are under-insured and tax self-insurance if consumers are over-insured. |