Catastrophic risk: social influences on insurance decisions

Michal Krawczyk, Stefan Trautmann and Gijs Kuilen

Theory and Decision, 2017, vol. 82, issue 3, No 1, 309-326

Abstract: Abstract We study behavioral patterns of insurance demand for low-probability large-loss events (catastrophic losses). Individual patterns of belief formation and risk attitude that were suggested in the behavioral decisions literature emerge robustly in the current set of insurance choices. However, social comparison effects are less robust. We do not find any evidence for peer effects (through social-loss aversion or imitation) on insurance take-up. In contrast, we find support for the prediction that people underweight others’ relevant information in their own decision making.

Keywords: Insurance; Risk attitudes; Beliefs; Catastrophic risk (search for similar items in EconPapers)
JEL-codes: C91 D81 D83 G22 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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DOI: 10.1007/s11238-016-9571-y

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