Behavioral foundations of the substitutability between insurance and self-insurance: An experimental study

François Pannequin, Anne Corcos and Claude Montmarquette

CIRANO Working Papers from CIRANO

Abstract: In this experimental study, the analysis on two levels of substitution between insurance and self-insurance shows that a higher unit price results in a quantity-based substitution and a between-tools substitution while the only effect of a higher fixed cost is to reduce the insurance market. The optimality of the coverage demands associated with the equalization of marginal returns is not achieved. Instead, individuals chose a stable global amount of coverage. These behavioral insights have a potential impact on public policies related to insurance and self-insurance.

Keywords: insurance; self-insurance; substitutability; lab experiment; risk-aversion (search for similar items in EconPapers)
Date: 2016-03-14
New Economics Papers: this item is included in nep-exp and nep-ias
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:cir:cirwor:2016s-12

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