The affection effect in an incentive compatible insurance demand experiment

Vijay Aseervatham, Johannes G. Jaspersen and Andreas Richter

Economics Letters, 2015, vol. 131, issue C, 34-37

Abstract: Experimental studies have documented an affection effect in general decisions under risk as well as in insurance demand decisions. Most studies reporting this effect have not used salient and incentive compatible payments for the subjects. This might have skewed the results in favor of the hypotheses. In this note we revisit the affection effect in an insurance demand experiment with incentive compatible payments. We find the effect to be robust to the new experimental design further corroborating the established result of the affect heuristic in insurance decisions.

Keywords: Behavioral insurance; Insurance demand; Affect heuristic (search for similar items in EconPapers)
JEL-codes: D03 D81 G22 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:131:y:2015:i:c:p:34-37

DOI: 10.1016/j.econlet.2015.03.029

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