We develop a pricing rule for life insurance under stochastic mortality in an incomplete market by assuming that the insurance company requires compensation for its risk in the form of a pre-specified instantaneous Sharpe ratio. Our valuation formula satisfies a number of desirable properties, many of which it shares with the standard deviation premium principle. The major result of the paper i...

In this work, we consider an interesting variant of the well studied KP model for selfish routing on parallel links, which reflects some influence from the much older Wardrop model [29]. In the new model, user traffics are still unsplittable and links are identical. Social Cost is now the expectation of the sum, over all links, of Latency Costs; each Latency Cost is modeled as a certain polynom...

Abstract We consider the application of a Fleischer–Jegerlehner-like treatment tadpoles to calculation neutral scalar masses (including Higgs) in general theories beyond Standard Model. This is especially useful when theory contains new scalars associated with small expectation value, but comes its own disadvantages. show that these can be overcome by combining effective field matching. provide...

Abstract Despite widespread exposure to substantial medical expenditure risk in low-income populations, health insurance enrollment is typically low. This puzzling from the perspective of expected utility theory. To help explain it, this paper introduces a decomposition stated willingness pay (WTP) for into its fair price and three behavioral deviations that due perception attitude consistent w...

This paper studies the electricity price formation in a competitive market when introducing generation from variable renewable energy technologies with zero marginal cost and electric storage systems. A power system is analyzed stochastic optimization model combining multi-period optimal flow dynamic programming. The results illustrate how energy, this case solar photo-voltaic generation, displ...

T single-product firms with different quality levels and fixed limited capacities engage in sequential price competition in an essentially deterministic model where customers have heterogeneous valuations for both products. We develop conditions under which the leader (she) can take strategic advantage of her limited capacity by pricing relatively low, purposefully creating shortages and leavin...

A commonly observed two-stage pricing strategy for a custom-made product involves a prepurchase entry fee for a potential consumer and a purchase price if he decides to buy the product. We solve and compare two settings: In the first, the firm does not commit in advance to the second-stage price and in the second, the firm does. We show that without a commitment mechanism, the two price points ...

A large body of evidence shows that buying behaviour is strongly determined by consumers' price expectations and the extent to which real prices violate these expectations. Despite the importance of this phenomenon, little is known regarding its neural mechanisms. Here we show that two patterns of electrical brain activity known to index prediction errors-the Feedback-Related Negativity (FRN) a...