Impact of Self-Protection and Self-Insurance on Individual Response to Risk, The

Jason Shogren

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: We develop four experimental markets to examine how individuals respond to risk: self-protection and self-insurance in both private and collective auctions. First, we find evidence that the mechanism used to reduce risk is important. Results indicate that the upper and lower bounds on value were elicited by the private self-protection and the collective self-insurance markets. Second, the robustness of these results declined with low probability lotteries. We find further evidence that individuals overestimate the impact of low probability events. Overestimation decreased, however, with repeated market exposure. Third, the four markets induced rapid value formation. Usually only one or two additional market trials were necessary before an individual's perception and valuation of reduced risk stabilized.

Date: 1990-03
References: Add references at CitEc
Citations: View citations in EconPapers (32)

Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/90wp53.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=657 Online Synopsis (text/html)

Related works:
Journal Article: The Impact of Self-protection and Self-insurance on Individual Response to Risk (1990)
Working Paper: Impact of Self-Protection and Self-Insurance on Individual Response to Risk (The) (1990)
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:ias:cpaper:90-wp53

Access Statistics for this paper

More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().