How Prevention Affect Individuals’ Insurance Choices? An Experimental Study
We propose an original lab experiment to analyze how introducing a risk prevention mechanism affects individuals’ insurance choices. After choosing a level of coverage in a compulsory insurance contract, the insured can make a costly prevention effort to reduce the likelihood of a loss occurring (self-protection). Our study shows that the possibility of a posteriori prevention encourages policyholders to choose lower levels of coverage, which reveals their intention to take precautionary actions to mitigate their risk. However, this intention to prevent does not turn into real action revealing a dynamic inconsistency of choices: individuals who deliberately choose to be less insured when a prevention option is available do not subsequently engage in more prevention efforts afterwards
Year of publication: |
[2022]
|
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Authors: | Plantier, Morgane ; Mouminoux, Claire ; Rulliere, Jean-Louis |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
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