Decision-making under uncertainty and demand for insurance: an empirical study

Cristina Ottaviani () and Daniela Vandone ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: In this study we empirically estimated the role played by attitudes toward risk in insurance decision-making. To this end, we used the Iowa Gambling Task coupled with skin conductance recording, a validated experimental task of decision making under ambiguity which provides two dimensions of risk taking: the performance at the risk, as a measure of risk propensity, and the functioning of the somatic marker, as a measure of risk perception, that is the ability of the individual to “feel” the risk, independently of his/her risk attitude. The sample was made by 445 households and demographic-socio economical profiles were also obtained. Aside from confirming the role played by socio-economic explanatory variables, such as income level and marital status, on insurance purchase, results from the probit model showed the relevance of psychophysiological data: the likelihood of insurance demand is higher for people who are more risk seeking (worse performance at the task) but are adaptively able to feel the risk (anticipatory skin conductance responses to disadvantageous decks). Results are discussed in light of the need of interdisciplinary research.

Keywords: Insurance demand; decision making; ambiguity; risk taking; Iowa gambling task (search for similar items in EconPapers)
JEL-codes: D03 G22 (search for similar items in EconPapers)
Date: 2011-02-23
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://wp.demm.unimi.it/files/wp/2011/DEMM-2011_005wp.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to aaa.unimi.it:80 (nodename nor servname provided, or not known) (http://wp.demm.unimi.it/files/wp/2011/DEMM-2011_005wp.pdf [302 Found]--> http://aaa.unimi.it)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2011-05

Access Statistics for this paper

More papers in Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano Via Conservatorio 7, I-20122 Milan - Italy. Contact information at EDIRC.
Bibliographic data for series maintained by DEMM Working Papers ( this e-mail address is bad, please contact ).