Insurance, Information, and Individual Action: Discussion.

This article presents views on papers presented by Michael Spence and Richard Zeckhauser and that of William Brainard and F. T. Dolber during a panel discussion focused on optimum insurance revisions and on the link between social risk and risk premia, respectively. Martin J. Bailey agrees that the Spence-Zeckhauser paper presents a theory of optimum insurance provisions when all premia are actuarial: utility-maximizing zero-cost insurance, with and without moral hazards, variously specified. On the other hand, the Brainard-Dolbear study recognizes the well-developed theory of risk and presented a good review of the broad sweep of the subject and offers a comprehensive view of the insurance market. Donald D. Hester views the approach undertaken in the study is very restrictive for they are forced to assume that all individuals have identical prospects, resources, and utility functions. Finally, the studies presented proposals which attempted to: (1) apply to the micro-economic expected utility apparatus in a general equilibrium context; (2) to permit assignment of laborers to other employees; and (3) to establish futures markets in human capital are heady stuff.