schemes can also reduce insurers' incentives to conduct appropriate risk management. We investigate stock insurers' risk … a risk-based premium assessment. We identify which guarantee scheme maximizes policyholders' welfare, measured by their … expected utility. We find that the risk-based insurance guarantee scheme can only mitigate the insurer's risk-shifting behavior …

-related torts when consumers are heterogeneously overconfident about the risk of harm. We elucidate the role of factors shaping the …