Do bad risks know it?: experimental evidence on optimism and adverse selection

Coelho, Marta and de Meza, David (2012) Do bad risks know it?: experimental evidence on optimism and adverse selection. Economics letters, 114 (2). pp. 168-171. ISSN 0165-1765

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Abstract

Subjects who overestimate their performance in experimental tasks unrelated to travel are less willing to insure against failing in the task and also less inclined to buy travel insurance. This suggests intrinsic optimism influences insurance demand and diminishes adverse selection

Item Type:	Article
Official URL:	http://www.journals.elsevier.com/economics-letters...
Additional Information:	© 2011 Elsevier
Uncontrolled Keywords:	ISI, optimism, forecast error, selection effects, insurance
Library of Congress subject classification:	H Social Sciences > HG Finance
Journal of Economic Literature Classification System:	C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior D - Microeconomics > D6 - Welfare Economics > D60 - General D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
Sets:	Departments > Management
Rights:	http://www.lse.ac.uk/library/rights/LSERO.htm
URL:	http://eprints.lse.ac.uk/39074/

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