Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard … implications of different insurance designs. I find cost-sharing never to be an optimal solution as it produces two novel …

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 …. Our main findings are robust to a variety of modeling assumptions. -- deductible ; loss aversion ; probability weighting …

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 … important role in explaining the aversion to risk manifested in deductible choices. This finding is robust to allowing for …