کد مقاله کد نشریه سال انتشار مقاله انگلیسی نسخه تمام متن
885357 912675 2008 15 صفحه PDF دانلود رایگان
عنوان انگلیسی مقاله ISI
On the preference for full-coverage policies: Why do people buy too much insurance?
موضوعات مرتبط
علوم انسانی و اجتماعی مدیریت، کسب و کار و حسابداری بازاریابی و مدیریت بازار
پیش نمایش صفحه اول مقاله
On the preference for full-coverage policies: Why do people buy too much insurance?
چکیده انگلیسی

One of the most intriguing questions in insurance is the preference of consumers for low or zero deductible insurance policies. This stands in sharp contrast to a theorem proved by Mossin [Mossin, J. (1968). Aspects of rational insurance purchasing. Journal of Political Economy, 76, 553–568], that under quite common assumptions when the price of insurance is higher than its actuarial value, then full coverage is not optimal.We show in a series of experiments that amateur subjects tend to underestimate the value of a policy with a deductible and that the degree of underestimation increases with the size of the deductible. We hypothesize that this tendency is caused by the anchoring heuristic. In particular, in pricing a policy with a deductible subjects first consider the price of a full-coverage policy. Then they anchor on the size of the deductible and subtract it from the price of the full-coverage policy. However, they do not adjust the price enough upward to take into account the fact that there is only a small chance that the deductible will be applied toward their payments. We also show that professionals in the field of insurance are less prone to such a bias. This implies that a policy with a deductible priced according to the true expected payments may seem “overpriced” to the insured and therefore may not be purchased. Since the values of full-coverage policies are not underestimated the insured may find them as relatively better “deals”.

ناشر
Database: Elsevier - ScienceDirect (ساینس دایرکت)
Journal: Journal of Economic Psychology - Volume 29, Issue 5, November 2008, Pages 747–761
نویسندگان
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