Decision theories and probabilistic insurance: an experimental test

  1. Tomás Lucas, Josefa
  2. Herrero Blanco, Carmen
Aldizkaria:
Spanish economic review

ISSN: 1435-5469

Argitalpen urtea: 2006

Alea: 8

Zenbakia: 1

Orrialdeak: 35-52

Mota: Artikulua

DOI: 10.1007/S10108-005-0102-1 DIALNET GOOGLE SCHOLAR

Beste argitalpen batzuk: Spanish economic review

Laburpena

This paper reports the results of an experiment in which probabilistic insurance, as proposed by Kahneman and Tversky (1979), is compared both with full insurance and no insurance. The experimental results conform to the intuitive prediction that risk-averse agents who are indifferent between full insurance and no insurance, will prefer full insurance to probabilistic insurance and probabilistic insurance to no insurance. The first conclusion is incompatible with the predictions of expected utility theory, and the second with Kahneman and Tversky's prospect theory. We also show that Loomes and Sudgen's regret theory can easily accommodate these intuitive results.

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Datuen iturria: Dialnet