Related papers: Increasing countries financial resilience through …
A canonical social dilemma arises when finite resources are allocated to a group of people, who can choose to either reciprocate with interest, or keep the proceeds for themselves. What resource allocation mechanisms will encourage levels…
Combining distributions is an important issue in decision theory and Bayesian inference. Logarithmic pooling is a popular method to aggregate expert opinions by using a set of weights that reflect the reliability of each information source.…
In the collective-risk social dilemma, players lose their personal endowments if contributions to the common pool are too small. This fact alone, however, does not always deter selfish individuals from defecting. The temptations to…
The pooling problem has applications, e.g., in petrochemical refining, water networks, and supply chains and is widely studied in global optimization. To date, it has largely been treated deterministically, neglecting the influence of…
Riverine flooding poses significant risks. Developing strategies to manage flood risks requires flood projections with decision-relevant scales and well-characterized uncertainties, often at high spatial resolutions. However, calibrating…
Flood risk changes in time and is influenced by both natural and socio-economic trends and interactions. In Europe, previous studies of historical flood losses corrected for demographic and economic growth ("normalized") have been limited…
Background: Rapid testing for an infection is paramount during a pandemic to prevent continued viral spread and excess morbidity and mortality. This study aimed to determine whether alternative testing strategies based on sample pooling can…
To mitigate the risk posed by extreme rainfall events, we require statistical models that reliably capture extremes in continuous space with dependence. However, assuming a stationary dependence structure in such models is often erroneous,…
Water markets represent a policy tool that aims at finding efficient water allocations among competing users by promoting reallocations from low-value to high-value uses. In Canada, water markets have been discussed and implemented at the…
Extreme weather events have an enormous impact on society and are expected to become more frequent and severe with climate change. In this context, resilience planning becomes crucial for risk mitigation and coping with these extreme…
Recent studies have found evidence of a negative association between economic complexity and inequality at the country level. Moreover, evidence suggests that sophisticated economies tend to outsource products that are less desirable (e.g.…
This paper designs a sequential repeated game of a micro-founded society with three types of agents: individuals, insurers, and a government. Nascent to economics literature, we use Reinforcement Learning (RL), closely related to…
We consider an optimal control problem of a property insurance company with proportional reinsurance strategy. The insurance business brings in catastrophe risk, such as earthquake and flood. The catastrophe risk could be partly reduced by…
Recovery of society after a large scale disaster generally consists of two phases, short- and long-term recoveries. The main goal of the short-term recovery is to bounce the damaged system back to the operating standards enabling residents…
Major events like natural catastrophes or the COVID-19 crisis have impact both on the financial market and on claim arrival intensities and claim sizes of insurers. Thus, when optimal investment and reinsurance strategies have to be…
In this paper, we propose a fully decentralized and smart contract-based insurance protocol. We identify various issues in the Decentralized Finance (DeFi) insurance context and propose a solution to overcome these shortcomings. We…
In this paper, we examine the effect of background risk on portfolio selection and optimal reinsurance design under the criterion of maximizing the probability of reaching a goal. Following the literature, we adopt dependence uncertainty to…
The interconnectedness of financial institutions affects instability and credit crises. To quantify systemic risk we introduce here the PD model, a dynamic model that combines credit risk techniques with a contagion mechanism on the network…
Covered bonds are a specific example of senior secured debt. If the issuer of the bonds defaults the proceeds of the assets in the cover pool are used for their debt service. If in this situation the cover pool proceeds do not suffice for…
Portfolio underdiversification is one of the most costly losses accumulated over a household's life cycle. We provide new evidence on the impact of financial inclusion services on households' portfolio choice and investment efficiency using…