Standard accident models are based on the expected utility framework and represent agents’ beliefs about accident risk with a probability distribution. Consequently, they do not allow for Knightian uncertainty, or ambiguity, with respect to accident risk and cannot accommodate optimism...

We use data on households' deductible choices in auto and home insurance to estimate a structural model of risky choice that incorporates "standard" risk aversion (concave utility over final wealth), loss aversion, and nonlinear probability weighting. Our estimates indicate that nonlinear...

We use data on insurance deductible choices to estimate a structural model of risky choice that incorporates "standard" risk aversion (diminishing marginal utility for wealth) and probability distortions. We find that probability distortions?characterized by substantial overweighting of small...

We outline a strategy for distinguishing rank-dependent probability weighting from systematic risk misperceptions in field data. Our strategy relies on singling out a field environment with two key properties: (i) the objects of choice are money lotteries with more than two outcomes; and (ii)...

We use data on insurance deductible choices to estimate a structural model of risky choice that incorporates "standard" risk aversion (diminishing marginal utility for wealth) and probability distortions. We find that probability distortions - characterized by substantial overweighting of small...

Using a unique dataset, we test whether households' deductible choices in auto and home insurance reflect stable risk preferences. Our test relies on a structural model that assumes households are objective expected utility maximizers and claims are generated by household-coverage specific...

The paper suggests a similarity function for applications of empirical similarity theory in which the notion of similarity is asymmetric. I propose defining similarity in terms of a quasimetric. I suggest a particular quasimetric and explore the properties of the empirical similarity model given...