Citation

Abrahamsen EB, Asche F. Reliab. Eng. Syst. Safety 2011; 96(3): 361-364.

Copyright

(Copyright © 2011, Elsevier Publishing)

DOI

10.1016/j.ress.2010.10.004

PMID

unavailable

Abstract

This paper focuses on how access to an insurance market should influence investments in safety measures in accordance with the ruling paradigm for decision-making under uncertainty--the expected utility theory. We show that access to an insurance market in most situations will influence investments in safety measures. For an expected utility maximizer, an overinvestment in safety measures is likely if access to an insurance market is ignored, while an underinvestment in safety measures is likely if insurance is purchased without paying attention to the possibility for reducing the probability and/or consequences of an accidental event by safety measures.

Language: en