Barseghyan, Levon; Molinari, Francesca; O'Donoghue, Ted; … - 2012
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 …
