On the basis of a real high stakes insurance experiment with small probabilities of losses, we demonstrate that concern … is a more important driver of WTP for insurance than subjective probability estimates when there is ambiguity surrounding … probability insurance "puzzle" well known from the literature, where a part of individuals pays too much and a part nothing for …

from domestic banks. As public debt approached sustainability limits in a number of countries, however, high bank exposure … to sovereign risk created a fragile inter-dependence between fiscal and bank solvency. This paper presents a simple model …