An Experimental Study of the Full-Coverage Puzzle

Itzhak Venezia and Zur Shapira

Yale School of Management Working Papers from Yale School of Management

Abstract: One of the most intriguing questions in insurance is the preference of consumers to buy low or no deductible insurance policies. This stands in sharp contrast to the theorem, proved by Mossin, 1968, that when the price of insurance is higher than its actuarial value, then under quite reasonable assumptions full coverage is not optimal. We show in a set of experiments that amateur subjects tend to underestimate the value of a policy with a deductible and that the degree of underestimation depends on the level

Date: 2003-02-01, Revised 2003-04-01
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://icfpub.som.yale.edu/publications/2594 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to icfpub.som.yale.edu:80 (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.)

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:ysm:somwrk:ysm335

Access Statistics for this paper

More papers in Yale School of Management Working Papers from Yale School of Management Contact information at EDIRC.
Bibliographic data for series maintained by ().