Lisa L. Posey

Color portrait of Lisa L. Posey

Associate Professor

Department Risk Management
Office Address 369 Business Building
Phone Number 814-865-0615
Email Address llp3@psu.edu

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Lisa Posey is an Associate Professor specializing in Insurance Economics and Markets. Dr. Posey has studied the insurance underwriting cycle, pricing issues, availability crises in liability insurance markets, insurance distribution systems, attorney involvement in out of court settlements, transmission of information through contracting, and the simultaneous demand for insurance and gambling, among other things. Her research has been published in the Journal of Risk and Insurance, the Journal of Risk and Uncertainty, the Journal of Economic Behavior and Organization, the International Review of Law and Economics, the Journal of Urban Economics, the Journal of Insurance Issues and the Journal of Actuarial Practice. Professor Posey's teaching interests include commercial insurance markets and corporate risk management at both the M.B.A. and undergraduate levels.

Expertise

Dr Posey's research focuses on economic modeling of insurance markets with and without asymmetric information.

Education

MS, Genetics, The Pennsylvania State University, 2008

Ph D, Applied Economics, University of Pennsylvania, 1992

MA, Applied Economics, University of Pennsylvania, 1991

BA, Economics, Rutgers University, 1988

Courses Taught

RM 301 – Risk and Decisions (3)
Introduction to decision-making under uncertainty. Mathematical probability and statistics, decision theory and game theory will be studied. R M 301 Risk and Decisions (3) Most tough business decisions involve risk. Smark risk-taking requires special analytical problem solving skills and careful consideration of the relevant data. In this course, you will learn how to conceptualize decisions involving risk, how to analyze your choices, how to estimate the risk, and how to communicate and defend your analysis to others. The skills and tools you will learn come from economics, probability, statistics, and game theory. The focus will be on how the tools from these fields are applied to real world business decisions in risky environments. The concept of risk diversification will be discussed under both independent and correlated risks. Decision rules such as expected value maximization and expected utility maximization will be covered. The role of risk aversion of the decision-making process will be discussed along with how it can be measured. The study of decision analysis will include the use of decision tress. The basic concepts in game theory will be introduced. Students will learn what a Nash equilibrium is and how to derive such an equilibrium. More complicated games with incomplete information will be introduced which are important in decision-making where parties often are missing key pieces of information but must still choose a business strategy. Problems of asymmetric information will be studied; these situations arise when one party to a transaction or contract has more information relevant to the decision than the other party. For these types of problems, such as adverse selection and moral hazard, optimal solutions will be discussed.

RM 494H – Research Project (3)
Supervised honor student research projects identified on an individual or small-group basis.

RM 320W – Risk Mgmt and Ins (3)
Goals and methods of risk management. Commercial insurance and alternative risk transfer (ART) methods in addition to the characteristics of insurance markets and intermediaries used by risk managers. This course covers the risk management process used by organizations to deal with the risks that they face with an emphasis on the types of risk commonly handled through the commercial insurance market. It addresses the costs and benefits of risk management, the goals of the process and the methods available to handle risks. The methods covered include both traditional and nontraditional ones including retention, commercial insurance, captive insurers, loss sensitive contracts, finite risk plans and securitization. The characteristics of the insurance markets and intermediaries used by risk managers are studied. These include insurance company organizational forms, operational structures, measures of performance, regulation and the role of brokers. The risks to organizations that are addressed include risks to employees, risks to customers, risks to shareholders and risks to third parties. The types of insurance covered include workers compensation, employment practices liability, products liability, general liability, directors and officers liability and environmental impairment liability. In addition, the failure of risk management during the recent financial crisis is analyzed. The course ends with a case study of risk management at Penn State University to give students a detailed perspective of the risk management program of a complex organization and to provide insight into how changes in the market environment can significantly affect such a program.

R M 320W – Risk Management and Insurance (3)
Goals and methods of risk management. Commercial insurance and alternative risk transfer (ART) methods in addition to the characteristics of insurance markets and intermediaries used by risk managers.

R M 301 – Risk and Decisions (3)
Introduction to decision-making under uncertainty. Mathematical probability and statistics, decision theory and game theory will be studied.

R M 496 – Independent Studies (Variable)
Creative Projects, including research and design, which are supervised on an individual basis and which fall outside the scope of formal courses.

INS 301 – Risk and Insurance (3)
Introduction to the principles and methods of handling business and personal risks; emphasis on insurance techniques.

INS 310W – Property and Liability Insurance Market (3)
Property and liability insurance industry and company operations.

INS 405 – Corporate Risk Management (3)
Insurance management for corporate organizations; self-insurance, risk transfer, and other alternatives to insurance.

INS 497C – The Economics of Biotechnology, Phamaceuticals and Health Insurance (3)
The course provides an overview of the economic and management issues facing the biotechnology and pharmaceutical industries. Topics covered will include R&D, financing, alliances and joint ventures, M&A, production, marketing and the important role of pu

INS 496 – Independent Studies (variable)
Creative Projects, including research and design, which are supervised on an individual basis and which fall outside the scope of formal courses.

INS 395 – Internship (variable)
Supervised off-campus, nongroup instruction including field experiences, practica, or internships. Written and oral critique of activity required.

INS 575 – Risk Management (2)
Develop an understanding of the risks facing corporations and the methods available to deal with those risks.

Selected Publications

Posey L. L., Thistle P. D., "Large Losses and Equilibrium in Insurance Markets." Geneva Risk and Insurance Review, 2019.
Posey L. L., Thistle P. D., "Automobile Insurance and Driver Ability: Contract Choice as a Screening Mechanism." Geneva Risk and Insurance Review, vol. 42, no. 2, 2017, pp. 141-170.
Posey L. L., Bajtelsmit V., "Insurance and Endogenous Bankruptcy Risk: When Is It Rational to Both Buy Insurance and Create the Potential for Bankruptcy?." Geneva Risk and Insurance Review, vol. 42, no. 1, 2017, pp. 15-40.
Posey L. L., Kawasaki F., Ordway R. W., Iyer J., Sun C. E., Mammen S. E., Huaru Y., "The DISABLED protein functions in CLATHRIN-mediated synaptic vesicle endocytosis and exoendocytic coupling at the active zone." Proceedings of the National Academy of Sciences of The U.S.A., 2011.
Posey L. L., Yavas A., "Screening equilibria in experimental markets." Geneva Risk and Insurance Review, vol. 32, 2007, pp. 147-167.
Posey L. L., "Switching Competition and Pricing in the Property-Liability Insurance Market for Large Commercial Accounts." Journal of Insurance Issues, vol. 26, 2003, pp. 29-50.
Posey L. L., Yavas A., "Adjustable and Fixed Rate Mortgages as a Screening Mechanism for Default Risk." Journal of Urban Economics, vol. 49, 2001, pp. 54-79.
Posey L. L., "The Impact of Fee-Shifting Tort Reform on Out-of-Court Settlements." Journal of Insurance Issues, vol. 23, 2000, pp. 124-139.
Posey L. L., Doherty N. A., "On the Value of a Checkup: Adverse Selection, Moral Hazard and the Value of Information." Journal of Risk and Insurance, vol. 65, 1998, pp. 189-211.
Posey L. L., Tennyson S., "The Coexistence of Distribution Systems under Price Search: Theory and Some Evidence from Insuranc." Journal of Economic Behavior and Organization, vol. 35, 1998, pp. 95-115.
Posey L. L., Doherty N. A., "Availability Crises in Insurance Markets: Optimal Contracts with Asymmetric Information and Capacity Constraint." Journal of Risk and Uncertainty, vol. 15, 1997, pp. 55-80.
Posey L. L., "Two Methods of Financing a Given Level of Charitable Hospital Care: Welfare Implications for the Insured." Journal of Risk and Insurance, vol. 64, 1997, pp. 138-154.
Posey L. L., Yavas A., "A Search Model of Marketing Systems in Property-Liability Insurance Markets." Journal of Risk and Insurance, vol. 62, 1995, pp. 666-689.
Posey L. L., Shapiro A. F., "Decision Making Under Conflicting Criteria for Actuarial Assumptions: An Expected Utility Model." Journal of Actuarial Practice, vol. 3, 1995, pp. 117-127.
Posey L. L., "Limited Liability and Incentives When Firms Can Inflict Damages Greater Than Net Worth." International Review of Law and Economics, vol. 13, 1993, pp. 325-330.

Editorship

Journal of Insurance Issues, Associate Editor, January 2002 - January 2015