Theodora Dupont - Academia.edu (original) (raw)
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This paper investigates how people behave when confronted with low probability events and ambigui... more This paper investigates how people behave when confronted with low probability events and ambiguity in an insurance context. It reports the results of an experiment submitted to a large representative sample of the French population that aims at separating attitudes toward risk, imprecision and conflict and at determining if there is a market for ambiguous and extreme event risks. The data show a strong distinction between two decisions: the decision of purchasing insurance or not, and the decision of the willingness to pay for insurance. In the first decision, results reveal that more than 25% of the respondents refuse to buy insurance and that people are more willing to buy insurance in a risky situation than in an ambiguous one. Besides revealing a certain taste for risk, it also highlights a lack of confidence in the insurance markets. In addition, the decision to insure can be explained by certain observable characteristics of the respondents. In the second decision, the results point out that people are willing to pay more under risk than under ambiguity (embracing here imprecision and conflict). Furthermore, respondents accept a higher premium under conflict than under imprecision, which reveals a preference for consensual information. However, it is not possible to find a set of observable characteristics explaining the level of the insurance premium.
This paper investigates how the general public behaves when confronted with low probability event... more This paper investigates how the general public behaves when confronted with low probability events and ambiguity in an insurance context. It reports the results of a questionnaire completed by a large representative sample of the French population that aims at separating attitudes toward risk, imprecision and conict and at determining if there is a demand for ambiguous and extreme event risks. The data show a strong distinction between two aspects of the problem: the decision of purchasing insurance and the willingness to pay. In the decision to insure, more than 25% of the respondents refuse to buy insurance and people are more willing to insure in a risky situation than in an ambiguous one. This certain taste for risk can be explained by the respondents' observable characteristics. In addition, it highlights a lack of condence in the insurance markets. When it comes to willingness to pay, people exhibit ambiguity seeking behaviors. They are willing to pay more under risk than under ambiguity (embracing here imprecision and conict), revealing that people consider ambiguous situations as inferior. Furthermore, respondents behave dierently under imprecision and conict. They exhibit a preference for consensual information and dislike conicts. However, the willingness to pay is poorly correlated with observable characteristics.
This paper investigates how people behave when confronted with low probability events and ambigui... more This paper investigates how people behave when confronted with low probability events and ambiguity in an insurance context. It reports the results of an experiment submitted to a large representative sample of the French population that aims at separating attitudes toward risk, imprecision and conflict and at determining if there is a market for ambiguous and extreme event risks. The data show a strong distinction between two decisions: the decision of purchasing insurance or not, and the decision of the willingness to pay for insurance. In the first decision, results reveal that more than 25% of the respondents refuse to buy insurance and that people are more willing to buy insurance in a risky situation than in an ambiguous one. Besides revealing a certain taste for risk, it also highlights a lack of confidence in the insurance markets. In addition, the decision to insure can be explained by certain observable characteristics of the respondents. In the second decision, the results point out that people are willing to pay more under risk than under ambiguity (embracing here imprecision and conflict). Furthermore, respondents accept a higher premium under conflict than under imprecision, which reveals a preference for consensual information. However, it is not possible to find a set of observable characteristics explaining the level of the insurance premium.
This paper investigates how the general public behaves when confronted with low probability event... more This paper investigates how the general public behaves when confronted with low probability events and ambiguity in an insurance context. It reports the results of a questionnaire completed by a large representative sample of the French population that aims at separating attitudes toward risk, imprecision and conict and at determining if there is a demand for ambiguous and extreme event risks. The data show a strong distinction between two aspects of the problem: the decision of purchasing insurance and the willingness to pay. In the decision to insure, more than 25% of the respondents refuse to buy insurance and people are more willing to insure in a risky situation than in an ambiguous one. This certain taste for risk can be explained by the respondents' observable characteristics. In addition, it highlights a lack of condence in the insurance markets. When it comes to willingness to pay, people exhibit ambiguity seeking behaviors. They are willing to pay more under risk than under ambiguity (embracing here imprecision and conict), revealing that people consider ambiguous situations as inferior. Furthermore, respondents behave dierently under imprecision and conict. They exhibit a preference for consensual information and dislike conicts. However, the willingness to pay is poorly correlated with observable characteristics.