ICES Experimental Economics Brown Bag Lecture
Ergodicity, Insurance, and Wealth Accumulation
Friday, December 6, 2024 12:00 PM to 1:00 PM EST
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
George Mason University
Ergodicity, Insurance, and Wealth Accumulation
Abstract
The application of ergodicity economics to the dynamics of insurance and wealth accumulation is explored. Traditional economic models, which often rely on expected wealth calculations, treat insurance contracts as zero-sum games. However, the time-average growth paradigm offers a new perspective, demonstrating that insurance can benefit both parties by enhancing their long-term wealth growth. By focusing on the time-average growth rate rather than expected wealth, this approach reveals how multiplicative dynamics and non-ergodic processes influence financial decision-making, offering a deeper understanding of risk management, wealth stabilization, and the existence of insurance markets.
For more information about the Brown Bag Lectures, please visit the Brown Bag Schedule homepage.
