baseline case where financial frictions are zero. Consistent with theory, small firms and firms without bond ratings show the …

transactions cost-mobility constraints. Contracts provide full unemployment insurance for risks that are diversifiable by pooling … among firms. Nondiversifiable (macro) risks are only partially shifted,largely through self-insurance (contingency saving … value because it reduces lifetime consumption. The main empirical implication of contract theory is shown to be closely …

Can measured risk attitudes and associated structural models predict insurance demand? In an experiment (n = 1,730), we … parameterize seventeen common structural models (e.g., expected utility, cumulative prospect theory). Subjects also make twelve … insurance choices over different loss probabilities and prices. The insurance choices show coherence and some correlation with …

Insurance affects the variability of consumption over time, which is not captured in standard expected utility of … value of insurance. Liquidity constraints generate high insurance demand when premiums are due smoothly, sometimes leading … to seemingly dominated choices. Conversely, a risk-averse person may value insurance below its expected value and appear …

illness can significantly increase the value of statistical life, helping to reconcile theory with empirical findings that …

, the age profile of the insurance coefficient is sharply increasing, whereas BPP find no clear age slope in their estimate … estimator of the true insurance coefficient has, in general, a downward bias that grows as borrowing limits become tighter …

does not alter this result. We also show that the informationally constrained optimal insurance contract has a resetting …