Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Affection Effect in Insurance Decisions

Contents:

Author Info

  • Hsee, Christopher K
  • Kunreuther, Howard C
Registered author(s):

    Abstract

    We use insurance behavior as a context to study affective influences in seemingly purely monetary decisions. We report two related findings. First, people are more willing to purchase insurance for an object at stake, the more affection they have for the object, holding the amount of compensation constant. Second, if the object is damaged, people are also more willing to go through the trouble of claiming a fixed amount of compensation, the more affection they have for the object. These effects are not predicted by standard decision theories. We explain these findings by a "consolation hypothesis," according to which, people perceive insurance compensation as a token of consolation, and we discuss its implications for affective influences in other types of decisions. Copyright 2000 by Kluwer Academic Publishers

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://journals.kluweronline.com/issn/0895-5646/contents
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Springer in its journal Journal of Risk and Uncertainty.

    Volume (Year): 20 (2000)
    Issue (Month): 2 (March)
    Pages: 141-59

    as in new window
    Handle: RePEc:kap:jrisku:v:20:y:2000:i:2:p:141-59

    Contact details of provider:
    Web page: http://www.springerlink.com/link.asp?id=100299

    Related research

    Keywords:

    References

    No references listed on IDEAS
    You can help add them by filling out this form.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Eldar Shafir, 2003. "Context, conflict, weights, and identities: some psychological aspects of decision making," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 48(Jun).
    2. David H. Krantz & Howard Kunreuther, 2006. "Goals and Plans in Protective Decision Making," NBER Working Papers 12446, National Bureau of Economic Research, Inc.
    3. Howard Kunreuther, 2001. "Risk Analysis and Risk Management in an Uncertain World," Center for Financial Institutions Working Papers 02-08, Wharton School Center for Financial Institutions, University of Pennsylvania.
    4. Lazanyi, Kornelia, 2011. "Organizational Consequences Of Emotional Labour In Mangenent," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 5.
    5. de Meza, David Emmanuel & Irlenbusch, Bernd & Reyniers, Diane, 2010. "Disclosure, Trust and Persuasion in Insurance Markets," IZA Discussion Papers 5060, Institute for the Study of Labor (IZA).
    6. Schade, Christian & Kunreuther, Howard & Kaas, Klaus Peter, 2002. "Low-probability insurance decisions: The role of concern," SFB 373 Discussion Papers 2002,23, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    7. Peter Wakker & Danielle Timmermans & Irma Machielse, 2007. "The effects of statistical information on risk ambiguity attitudes, and on rational insurance decisions," Natural Field Experiments 00338, The Field Experiments Website.
    8. David H. Krantz & Howard C. Kunreuther, 2007. "Goals and plans in decision making," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 2, pages 137-168, June.
    9. Schade, Christian & Kunreuther, Howard, 2002. "Worry and the illusion of safety: Evidence from a real-objects experiment," SFB 373 Discussion Papers 2002,25, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
    10. Daniel Vastfjall & Ellen Peters & Paul Slovic, 2008. "Affect, risk perception and future optimism after the tsunami disaster," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 3, pages 64-72, January.
    11. Zimmer, Anja & Schade, Christian & Gr√ľndl, Helmut, 2009. "Is default risk acceptable when purchasing insurance? Experimental evidence for different probability representations, reasons for default, and framings," Journal of Economic Psychology, Elsevier, vol. 30(1), pages 11-23, February.
    12. Slovic, Paul & Finucane, Melissa L. & Peters, Ellen & MacGregor, Donald G., 2007. "The affect heuristic," European Journal of Operational Research, Elsevier, vol. 177(3), pages 1333-1352, March.
    13. Marieke Huysentruyt & Daniel Read, 2008. "How do people value extended warranties?: Evidence from two field surveys," Working Papers 2008_02, Durham University Business School.
    14. Marieke Huysentruyt & Daniel Read, 2010. "How do people value extended warranties? Evidence from two field surveys," Journal of Risk and Uncertainty, Springer, vol. 40(3), pages 197-218, June.
    15. Jean Desrochers & J. Francois Outreville, 2013. "Uncertainty, Ambiguity and Risk Taking: an experimental investigation of consumer behavior and demand for insurance," ICER Working Papers 10-2013, ICER - International Centre for Economic Research.
    16. Philippe P. F. M. van de Calseyde & Gideon Keren & Marcel Zeelenberg, 2013. "The insured victim effect: When and why compensating harm decreases punishment recommendations," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(2), pages 161-173, March.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:kap:jrisku:v:20:y:2000:i:2:p:141-59. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.