Do bad risks know it? Experimental evidence on optimism and adverse selection

Marta Coelho and David de Meza

Economics Letters, 2012, vol. 114, issue 2, 168-171

Abstract: Subjects who overestimate their performance in experimental tasks unrelated to travel are less willing to insure against failing in the task and also less inclined to buy travel insurance. This suggests intrinsic optimism influences insurance demand and diminishes adverse selection.

Keywords: Optimism; Forecast error; Selection effects; Insurance (search for similar items in EconPapers)
JEL-codes: C91 D60 D81 D82 D83 D84 J24 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:114:y:2012:i:2:p:168-171

DOI: 10.1016/j.econlet.2011.10.012

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