Over the last twenty years, the consensus view of systemic risk in the financial system that emerged in response to the … on solvent banks leading to bank panics. But financial crises of the last two decades have not fit the mold. A new … facing financial institutions. The dramatic rise of modern risk management has changed how the risks of financial …

prices are held fixed. However, when insurance prices change endogenously to reflect updated enrollee risk pools, the same …This paper investigates consumer switching costs in the context of health insurance markets, where adverse selection is … at a large firm where we also observe individual-level panel data on health insurance choices and medical claims. We …

Using a unique dataset of insurance decisions by over 1,800 large U.S. corporations, this study provides the first … empirical analysis of firm behavior that compares corporate demand for property and catastrophe insurance (here, terrorism). We … decisions. The main finding is that demand for property and catastrophe insurance are not very different and that the demand for …

We examine the extent to which an individual's actual insurance and investment choices display a stable ranking in … willingness to bear risk, relative to his peers, across different contexts. We do so by examining the same individuals' decisions … regarding their 401(k) asset allocations and their choices in five different employer-provided insurance domains, including …

This paper describes the results of a web-based multi-period insurance purchasing experiment focusing on how … individuals make insurance choices for low-probability, high-consequence events. Participants were told the probability and … decided to purchase insurance after learning that they had suffered a loss and revealing that they were unhappy about having …

collective bias in agents' expectations. Agents in the model make risk management decisions with incomplete knowledge. They … protective actions -- decreasing risk exposures, hoarding liquidity, locking-up capital -- that reflect a flight to quality …

We propose a measure for systemic risk: CoVaR, the value at risk (VaR) of the financial system conditional on … institutions being under distress. We define an institution's contribution to systemic risk as the difference between CoVaR … leverage, size, and maturity mismatch predict systemic risk contribution. We also provide out of sample forecasts of a …

We study the relationship between compensation and risk-taking among finance firms using a neglected insight from … principal-agent contracting with hidden action and risk-averse agents. If the sensitivity of pay to stock price or slope does … not vary with stock price volatility, then total compensation has to increase with firm risk to satisfy as agent …