Demand Under Risk and Uncertainty: Insurance on Your Dream Car

Li Way Lee () and Aaron Keathley ()
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Li Way Lee: Wayne State University
Aaron Keathley: Wayne State University

Chapter Chapter 22 in 45 Conversations About Behavioral Economics, 2022, pp 89-92 from Springer

Abstract: Abstract You are buying your dream car. You want to consider collision insurance. The insurance agent offers the following information: (i) The average riskrisk of collision: 1% in 12 months, (ii) The average cost of car repair: $10,000, (iii) Collision insurance premium: $200 for 12 months with no deductible, and (iv) Most owners of new cars buy collision insurance. Do you buy the collision insurance or not? Tell me how you make that decision.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-05046-6_22

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DOI: 10.1007/978-3-031-05046-6_22

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