Given the possibility to modify the probability of a loss, will a profit-maximizing insurer engage in loss prevention … or is it in his interest to increase the loss probability? This paper investigates this question. First, we calculate the … expected profit maximizing loss probability within an expected utility framework. We then use Köszegi and Rabin's (2006, 2007 …

alternative theory characterized by loss aversion. This paper explains that the arguments in previous literature fail to support …A growing literature reports the conclusions that: (a) expected utility theory does not provide a plausible theory of … risk aversion for both small-stakes and large-stakes gambles; and (b) this decision theory should be replaced with an …

sensitivity to both gain and loss values in their decision. Further analyses show that specifically participants with higher …

Given the possibility to modify the probability of a loss, will a profit-maximizing insurer engage in loss prevention … or is it in his interest to increase the loss probability? This paper investigates this question. First, we calculate the … expected profit maximizing loss probability within an expected utility framework. We then use Köszegi and Rabin's (2006, 2007 …

We conduct a battery of experiments in which agents make choices from several pairs of all-loss-lotteries. Using these …

In this paper it is shown that the combination of mental accounting and loss aversion can fundamentally changes people … play of the players with loss aversion, and that the degree of the favorite-longshot bias depends on the mental accounting … process the players use. -- loss aversion ; mental accounting ; parimutuel betting ; the favorite-longshot bias …

theory model of risk preferences, we show that loss aversion can explain both of these behavioral phenomena. Using the … insights of this model, we develop a simple off-the-shelf probability assessment mechanism that encourages loss-averse agents …