Introduction

Robin Pearson ()
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Robin Pearson: University of Hull

Chapter Chapter 1 in Delusions of Competence, 2022, pp 1-7 from Palgrave Macmillan

Abstract: Abstract Hitherto, explanations of the crisis at the Lloyd’s insurance market in the late twentieth century have focused on the effects of catastrophic losses and poor governance. In contrast, this book argues that multiple delusions of competence were also at work. This chapter introduces this argument, evaluates the sources used, provides a definition of competence and surveys the literature on professional and scientific expertise, and the related research on behavioural economics and cognitive psychology. This literature has uncovered some of the fundamental behavioural responses that underpin notions of competence and that influence decision making under uncertainty. These findings can help us better understand why the crisis at Lloyd’s took the disastrous course that it did.

Keywords: Lloyd’s of London; Insurance; Expertise; Competence; Decision making under uncertainty (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palscp:978-3-030-94088-1_1

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DOI: 10.1007/978-3-030-94088-1_1

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