REVENUE RISKS, INSURANCE, AND THE BEHAVIOR OF COMPETITIVE FIRMS

This paper explores some issues relating to a competitive firm's choic e of the levels of output and insurance cover when faced with certain types of ''revenue risks.'' The analysis generalizes and extends exist ing results. In particular, we examine the implication, for the level of output and of insurance cover, of different risk attitudes of the f irm under variable and fixed premium schemes. The possibility of using the premium schedule in, say, an export credit-guarantee scheme, as a n instrument for stimulating the firm's output is noted.