蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Overconfidence, Insurance, and Paternalism
蝌蚪网 Review
vol. 97,
no. 5, December 2007
(pp. 1994–2004)
Abstract
It is well known that when agents are fully rational, compulsory public insurance may make all agents better off in the Rothschild and Stiglitz (1976) model of insurance markets. We find that when sufficiently many agents underestimate their personal risks, compulsory insurance makes low-risk agents worse off. Hence, behavioral biases may weaken some of the well-established rationales for government intervention based on asymmetric information. (JEL D82, G22)Citation
Sandroni, Alvaro, and Francesco Squintani. 2007. "Overconfidence, Insurance, and Paternalism." 蝌蚪网 Review 97 (5): 1994–2004. DOI: 10.1257/aer.97.5.1994Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- G22 Insurance; Insurance Companies; Actuarial Studies