This article is a brief outline of the implications of state-contingent production for the self-insurance problem. A general state-contingent approach to choice and production under uncertainty is presented. Upper and lower bounds for willingness-to-pay for reductions in ambient risk are derived.
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Univ Western Sydney, Sch Business, Locked Bag 1797, Penrith, NSW 2751, AustraliaUniv Western Sydney, Sch Business, Locked Bag 1797, Penrith, NSW 2751, Australia