Recent empirical work finds that surprisingly little variation in the demand for insurance is explained by … variation. Heterogeneous risk perceptions induce a systematic difference between the revealed and actual value of insurance as a … function of the insurance price. Using a sufficient statistics approach that accounts for this alternative source of …

This Paper looks at the effects of entrepreneurial optimism on financial contracting and corporate performance …. Optimism may increase effort, but is bad for adaptation decisions as the entrepreneur underweights negative information. The … possible, we show that insurance motives lead realists to prefer long-term debt, whereas short-term debt is the optimal …

Theory suggests that people facing higher uninsurable background risk buy more insurance against other risks that are … casualty insurance increases with earnings uncertainty. This finding is consistent with consumer preferences being …

We study a monopoly insurance model with endogenous information acquisition. Through a continuous effort choice …

What are the welfare effects of a policy that facilitates for insurance customers to privately and covertly learn about … their accident risks? We endogenize the information structure in Stiglitz's classic monopoly insurance model. We first show …