WP 2015

WP 2015-04 Behavioral Responses towards Risk Mitigation: An Experiment with Wild Fire Risks

Posted On April 6, 2015
Categories Working Papers, WP 2015

Download Paper

ABSTRACT. What are the behavioral effects of voluntary self-protection in situations where the probabilities are unknown to the agent? Virtually all naturally occurring environments of risk management involve subjective probabilities, and many allow decision makers to voluntarily mitigate risk using self-protection activities. To examine this environment we design a laboratory experiment in… more »

WP 2015-03 Risk Perceptions in the Virtual Wilderness

Posted On April 6, 2015
Categories Working Papers, WP 2015

Download Paper

ABSTRACT: In economic decision making most probabilities are formed in a compound manner through the interaction of multiple attributes of events, each of which have likelihoods that are unknown to various degrees. We consider how subjectively formed risk perceptions are affected by the dispersion of the underlying objective, compound probability distribution. Our… more »

WP 2015-02 Optimal Insurance Contracts with Insurer’s Background Risk

Posted On March 11, 2015
Categories Working Papers, WP 2015

Download Paper

ABSTRACT: Existing research on insurance contract theory emphasizes information problems and demand side issues when explaining contract structure. Supply-side factors, especially risk considerations at the insurer, have received much less attention. In this paper, we extend the optimal contracting framework of Raviv (1979) to explore how background risk at the insurer affects… more »