This paper extends the analysis of insurance contracts design to the case of "low probability events", when there is a probability mass on the "no accident-zero loss"-event. The optimality of the deductible clause is discussed both at the theoretical and empirical levels.

For psychologists, bounded rationality reflects the presence of cognitive dissonance and/or inconsistency, revealing that people use heuristics (Tversky and Kahneman (1974)) rather than sophisticated processes for the assessment of their beliefs. Recent research analyzing litigations and...

In this paper, we assume that a criminal organization is an agency where the Principal and the Agent have different sensibilities towards the risk of arrestation and punishment, and at the same time have different skills with respect to general organization tasks, crime realization or detection...

This papers studies three questions. What do we know about criminals 'preferences ? How should we represent such preferences ? What are the consequences for law enforcement policies ?

Le droit du licenciement expose-t-il les entreprises françaises à un "risque judiciaire"? L’article discute les arguments des différentes thèses (Blanchard et Tirole (2003), Cahuc et Kramarz (2004), Munoz-Perez et Serverin (2005)) en interprétant les informations empiriques disponibles...

Many industrial accidents result in losses (material damages or bodily injury) that cannot be perfectly compensated by a monetary payment, nor be perfectly insured. Moreover, often injurers control ex ante the magnitude rather than the probability of accidents. We study the characteristics of...

The purpose of this note is to investigate the optimal enforcement of the penal code when criminals invest in a specific class of avoidance activities termed dissembling activities (i.e. self-protection efforts undertaken by criminals to hedge their illegal gains in case of detection and...

By means of minimal assumptions on the individual preferences, I show that the Willingness To Pay (WTP) for both a FSD and SSD reduction of risk is the sum of a mean effect, a pure risk effect and a wealth effect. As a result, the WTP of a risk-averse decision maker may be lower than the WTP of...

This paper extends the analysis of insurance contracts design to the case of "low probability events", when there is a probability mass on the event "no accident-zero loss". The optimality of the deductible clause is discussed both at the theoretical and empirical levels.