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Is imprecise knowledge better than conflicting expertise? Evidence from insurers’ decisions in the United States

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  • Laure Cabantous
  • Denis Hilton
  • Howard Kunreuther
  • Erwann Michel-Kerjan

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    Abstract

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    File URL: http://hdl.handle.net/10.1007/s11166-011-9117-1
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    Bibliographic Info

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

    Volume (Year): 42 (2011)
    Issue (Month): 3 (June)
    Pages: 211-232

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    Handle: RePEc:kap:jrisku:v:42:y:2011:i:3:p:211-232

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    Web page: http://www.springerlink.com/link.asp?id=100299

    Related research

    Keywords: Ambiguity; Source of uncertainty; Insurance pricing; Decision-making; C93; D81; D83;

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Thibault Gajdos & Jean-Christophe Vergnaud, 2013. "Decisions with conflicting and imprecise information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00443075, HAL.
    2. Thibault Gajdos & Takashi Hayashi & Jean-Marc Tallon & Jean-Christophe Vergnaud, 2008. "Attitude toward imprecise information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00451982, HAL.
    3. Mohammed Abdellaoui & Aurelien Baillon & Laetitia Placido & Peter P. Wakker, 2011. "The Rich Domain of Uncertainty: Source Functions and Their Experimental Implementation," American Economic Review, American Economic Association, vol. 101(2), pages 695-723, April.
    4. Trudy Ann Cameron, 2001. "Updating Subjective Risks in the Presence of Conflicting Information: An Application to Climate Change," University of Oregon Economics Department Working Papers 2003-8, University of Oregon Economics Department, revised 14 Jul 2001.
    5. Mark J. Machina, 2009. "Risk, Ambiguity, and the Rank-Dependence Axioms," American Economic Review, American Economic Association, vol. 99(1), pages 385-92, March.
    6. John D Hey & Gianna Lotito & Anna Maffioletti, 2008. "The Descriptive and Predictive Adequacy of Theories of Decision Making Under Uncertainty/Ambiguity," Discussion Papers 08/04, Department of Economics, University of York.
    7. Crès, Hervé & Gilboa, Itzhak & Vieille, Nicolas, 2011. "Aggregation of multiple prior opinions," Journal of Economic Theory, Elsevier, vol. 146(6), pages 2563-2582.
    8. William Neilson, 2010. "A simplified axiomatic approach to ambiguity aversion," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 113-124, October.
    9. Sujoy Mukerji & Peter Klibanoff, 2002. "A Smooth Model of Decision,Making Under Ambiguity," Economics Series Working Papers 113, University of Oxford, Department of Economics.
    10. Viscusi, W Kip & Magat, Wesley A, 1992. " Bayesian Decisions with Ambiguous Belief Aversion," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 371-87, October.
    11. Ning Du & David V. Budescu, 2005. "The Effects of Imprecise Probabilities and Outcomes in Evaluating Investment Options," Management Science, INFORMS, vol. 51(12), pages 1791-1803, December.
    12. Hogarth, Robin M & Kunreuther, Howard, 1989. " Risk, Ambiguity, and Insurance," Journal of Risk and Uncertainty, Springer, vol. 2(1), pages 5-35, April.
    13. Arthur Snow, 2010. "Ambiguity and the value of information," Journal of Risk and Uncertainty, Springer, vol. 40(2), pages 133-145, April.
    14. Ghirardato, Paolo & Marinacci, Massimo, 2002. "Ambiguity Made Precise: A Comparative Foundation," Journal of Economic Theory, Elsevier, vol. 102(2), pages 251-289, February.
    15. Ho, Joanna L Y & Keller, L Robin & Keltyka, Pamela, 2002. " Effects of Outcome and Probabilistic Ambiguity on Managerial Choices," Journal of Risk and Uncertainty, Springer, vol. 24(1), pages 47-74, January.
    16. Erwann O. Michel-Kerjan, 2010. "Catastrophe Economics: The National Flood Insurance Program," Journal of Economic Perspectives, American Economic Association, vol. 24(4), pages 165-86, Fall.
    17. Viscusi, W Kip, 1997. "Alarmist Decisions with Divergent Risk Information," Economic Journal, Royal Economic Society, vol. 107(445), pages 1657-70, November.
    18. Robin M. Hogarth & Hillel J. Einhorn, 1990. "Venture Theory: A Model of Decision Weights," Management Science, INFORMS, vol. 36(7), pages 780-803, July.
    19. repec:hal:wpaper:hal-00443075 is not listed on IDEAS
    20. Enrico Rubaltelli & Rino Rumiati & Paul Slovic, 2010. "Do ambiguity avoidance and the comparative ignorance hypothesis depend on people’s affective reactions?," Journal of Risk and Uncertainty, Springer, vol. 40(3), pages 243-254, June.
    21. Heath, Chip & Tversky, Amos, 1991. " Preference and Belief: Ambiguity and Competence in Choice under Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 4(1), pages 5-28, January.
    22. Kunreuther, Howard & Meszaros, Jacqueline & Hogarth, Robin M. & Spranca, Mark, 1995. "Ambiguity and underwriter decision processes," Journal of Economic Behavior & Organization, Elsevier, vol. 26(3), pages 337-352, May.
    23. Thibault Gajdos & Jean-Christophe Vergnaud, 2009. "Decisions with conflicting and imprecise information," LSE Research Online Documents on Economics 27005, London School of Economics and Political Science, LSE Library.
    24. Christian Gollier, 2007. "Whom should we believe? Aggregation of heterogeneous beliefs," Journal of Risk and Uncertainty, Springer, vol. 35(2), pages 107-127, October.
    25. Camerer, Colin & Weber, Martin, 1992. " Recent Developments in Modeling Preferences: Uncertainty and Ambiguity," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 325-70, October.
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    Cited by:
    1. Howard Kunreuther & Geoffrey Heal & Myles Allen & Ottmar Edenhofer & Christopher B. Field & Gary Yohe, 2012. "Risk Management and Climate Change," NBER Working Papers 18607, National Bureau of Economic Research, Inc.
    2. 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.
    3. Aurélien Baillon & Laure Cabantous & Peter Wakker, 2012. "Aggregating imprecise or conflicting beliefs: An experimental investigation using modern ambiguity theories," Journal of Risk and Uncertainty, Springer, vol. 44(2), pages 115-147, April.
    4. Huang, Rachel J. & Huang, Yi-Chieh & Tzeng, Larry Y., 2013. "Insurance bargaining under ambiguity," Insurance: Mathematics and Economics, Elsevier, vol. 53(3), pages 812-820.
    5. Thibault Gajdos & Jean-Christophe Vergnaud, 2013. "Decisions with conflicting and imprecise information," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00443075, HAL.
    6. Thibault Gajdos & Jean-Christophe Vergnaud, 2009. "Decisions with conflicting and imprecise information," LSE Research Online Documents on Economics 27005, London School of Economics and Political Science, LSE Library.
    7. Marielle Brunette & Laure Cabantous & Stéphane Couture & Anne Stenger, 2013. "The impact of governmental assistance on insurance demand under ambiguity: a theoretical model and an experimental test," Theory and Decision, Springer, vol. 75(2), pages 153-174, August.
    8. Keck, Steffen & Diecidue, Enrico & Budescu, David V., 2014. "Group decisions under ambiguity: Convergence to neutrality," Journal of Economic Behavior & Organization, Elsevier, vol. 103(C), pages 60-71.

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