Protecting Against Low‐Probability Disasters
The Role of Worry
Bibliographic Data
| ID | 12165692 |
|---|---|
| Authors | Christian Schade (0000-0001-6879-4976, Humboldt‐Universitaet zu Berlin School of Business and Economics Berlin Germany, corresponding author), Howard Kunreuther (Wharton School Risk Management and Decision Processes CenterUniversity of Pennsylvania Philadelphia PA, USA), Philipp D Koellinger (0000-0001-7413-0412, Erasmus University Rotterdam), Philipp Koellinger (Erasmus University School of Economics Rotterdam The Netherlands) |
| Year | 2011 |
| Volume | 25 |
| Issue | 5 |
| Pages | 534-543 |
| Publication date | 2011-09-26 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Behavioral Decision Making (JOURNAL) |
| Journal identifiers | ISSN: 0894-3257 • E-ISSN: 1099-0771 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/bdm.754 |
| OpenAlex | W2132391791 |
| Language | EN |
| Citations received | 5 |
| References cited | 28 |
ABTRACT We carry out a large monetary stakes insurance experiment with very small probabilities of losses and ambiguous as well as exact probabilities. Many individuals do not want to pay anything for insurance whether the probabilities are given exactly or are ambiguous. Many others, however, are willing to pay surprisingly large amounts. With ambiguity, the percentage of those paying nothing is smaller and the willingness to pay (WTP) of the other individuals larger than with exact probabilities. Comparing elasticities with ambiguity, we find that worry is much more important than subjective probability in determining WTP for insurance. Furthermore, when the ambiguous loss probability is increased by a factor of 1000, it has almost no effect on WTP. Copyright © 2011 John Wiley & Sons, Ltd
Actuarial science · Ambiguity · Ambiguity aversion · Econometrics · Economics · Microeconomics · Willingness to pay · Worry · Computer Science · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies · Law, Economics, and Judicial Systems · Psychology
Psychological sources of ambiguity avoidance
Measuring utility by a single-response sequential method
Recent developments in modeling preferences
Relative importance of probabilities and payoffs in risk taking.
Psychological Expected Utility Theory and Anticipatory Feelings
Money, Kisses, and Electric Shocks
Ambiguity and uncertainty in probabilistic inference.
Estimation of Relationships for Limited Dependent Variables
Risk, Ambiguity, and the Savage Axioms
The Affect Heuristic
High reward experiments without high expenditure for the experimenter
Eliciting Reservation Prices
Risk as feelings
| Unique citing works | 5 |
|---|---|
| Citations per year | 0,38 |
| Citation span | 2013 - 2024 (12) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 5 |