Published in 2016 in Journal of Cognition and Culture, Volume 16, Issue 5.
ABSTRACT: The Internet and social media have opened niches for political exploitation of human dispositions to hyper-alarmed states that amplify perceived threats relative to their objective probabilities of occurrence. Researchers should aim to observe the dynamic “ramping up”… more »
ABSTRACT: Index insurance was conceived to be a product that would simplify the claim settlement process and make it more objective, reducing transaction costs and moral hazard. However, index insurance also exposes the insured to basis risk, which arises because there can be a mismatch between the index measurement and the… more »
ABSTRACT: A principal source of interest in behavioral economics has been its advertised contributions to policies aimed at ‘nudging’ people away from allegedly natural but self-defeating behavior toward patterns of response thought more likely to improve their welfare. This has occasioned controversies among economists and… more »
ABSTRACT: We take Cumulative Prospect Theory (CPT) seriously by rigorously estimating structural models using the full set of CPT parameters. Much of the literature only estimates a subset of CPT parameters, or more simply assume CPT parameter values from prior studies. Our data are from substantial laboratory experiments with undergraduate students… more »
ABSTRACT: Evidence of risk aversion in laboratory settings over small stakes leads to a priori implausible levels of risk aversion over large stakes under certain assumptions. One core assumption in statements of this calibration puzzle is that small-stakes risk aversion is observed over all levels of wealth, or… more »
Published in 2016 in European Actuarial Journal, Volume 6, Issue 2.
ABSTRACT: This is a summary of the main topics and findings from the Swiss Risk and Insurance Forum 2015. That event gathered experts from academia, insurance industry, regulatory bodies, and consulting companies to discuss the past and current developments and… more »
ABSTRACT: We compare several popular survey instruments for measuring gambling behavior and gambling propensity to assess if they differ in their classification of individuals in the general adult Danish population. We also examine correlations with standard survey instruments for alcohol use, anxiety, depression and impulsivity. A feature of our design is that… more »
ABSTRACT: A generic drug maker that has been sued for infringing a patent on a branded drug will sometimes promise, as part of an agreement settling the litigation, to delay selling its drug until as late as the expiration of the patent term. I adapt the standard optimal patent term model to… more »
Published in 2016 in The Journal of Risk and Insurance, Volume 83, Issue 1.
ABSTRACT: The generic insurance product involves an agent giving up a certain amount of money ex ante some risky event in the expectation of being given some money in the future if something unfortunate occurs. It is immediate… more »