uncertainty decreases the rate of efficient service provision and leads to less trade. In theory, insurance also decreases the … that considers both diagnostic uncertainty of sellers and the effects of insurance coverage of consumers in a unified … framework. We test the model’s predictions in a laboratory experiment. Both in theory and in the experiment diagnostic …

Advantageous (or propitious) selection occurs when an increase in the premium of an insurance contract induces high … motivate its advent by differences in risk-aversion among agents, implying different prevention efforts. We argue that it may … also appear in the absence of moral hazard, when agents only differ in riskiness and not in (risk) preferences. We first …

employee referrals, hiring decisions fall short of the (second-best) efficient outcome. We identify risk aversion as a …

. We uncover a trade-off between stimulus and insurance, as high-debt individuals gain considerably from transfers, but …

losses due to risk. We present empirical evidence from an artefactual field experiment in Ethiopia in which we introduce … formal insurance in a setting where donors make redistributive transfers to anonymously paired recipients. We find that … donors reduce their transfers to recipients who don’t take-up insurance, and that this effect is larger for donors who hold …

Insurance for natural hazards - earthquakes, hurricanes, or pandemics - is rarely comprehensively adopted without …. Efforts to close this insurance gap include the introduction of parametric (index) insurance products for various catastrophic … risks. We compare parametric to indemnity insurance in a simple model where the insurance company has superior information …

People often fail to insure against catastrophes, even when insurance is subsidized. Even when insuring homes, many … homeowners still underinsure the full value of their assets. Some researchers have suggested using long-term insurance contracts … to reduce these insurance gaps. We examine insurance decisions in a computer-administered experiment that makes several …