Behavioral weather insurance: Applying cumulative prospect theory to agricultural insurance design under narrow framing
نویسندگان
چکیده
منابع مشابه
Narrow Framing and Long-Term Care Insurance
We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is distinct from, and much larger than, the effects of cautiousness, risk aversion, or adverse selection, a...
متن کاملInsurance Demand under Prospect Theory: A Graphical Analysis
Many people do not take up desaster insurance for their houses even though premiums are subsidized. A well-known example is flood insurance. At the same time they buy highly loaded insurance contracts for modest risk. Examples here are extended warranties or cellular phone insurance. This paper shows that unlike traditional decision theory prospect theory can explain this evidence provided the ...
متن کاملConditioning under Cumulative Prospect Theory
This paper derives conditions under which the standard decomposition of unconditional expected utility into marginal probabilities and conditional expected utilities generalizes to Cumulative Prospect Theory. The results are relevant for empirical analyses in which marginal probabilities are used as explanatory variables.
متن کاملContributions of Agricultural Systems Modeling to Weather Index Insurance
Climate exerts a profound influence on the lives of rural populations, particularly the rural poor, who depend on agriculture for livelihood and sustenance, who are unprotected against climate-related diseases, who lack secure access to water and food, and who are vulnerable to hydrometeorological hazard. Climate shocks such as drought and flooding lead not only to loss of life, but also long-t...
متن کاملTrial and Settlement under Cumulative Prospect Theory
It is well-known that if the parties in a legal dispute agree about the likelihood of potential trial outcomes then they will be inclined to settle vs. going to trial in order to reduce litigation costs and risk. In this paper, we assume that both plaintiff and defendant evaluate this decision in accordance with Cumulative Prospect Theory. It is found that the two parties will sometimes be unab...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: PLOS ONE
سال: 2020
ISSN: 1932-6203
DOI: 10.1371/journal.pone.0232267