IDEAS home Printed from https://ideas.repec.org/a/now/fntmic/0700000002.html
   My bibliography  Save this article

Insurance Decision-Making and Market Behavior

Author

Listed:
  • Kunreuther, Howard
  • Pauly, Mark

Abstract

Considerable evidence suggests that many people for whom insurance is worth purchasing do not have coverage and others who appear not to need financial protection against certain events actually have purchased coverage. There are certain types of events for which one might expect to see insurance widely marketed that are viewed today by insurers as uninsurable and there are other policies one might not expect to be successfully marketed that exist on a relatively large scale. In addition, evidence suggests that cost-effective preventive measures are sometimes not rewarded by insurers in ways that could change their clients' behavior. These examples reveal that insurance purchasing and marketing activities do not always produce results that are in the best interest of individuals at risk. Insurance Decision-Making and Market Behavior discusses such behavior with the intent of categorizing these insurance "anomalies". It represents a first step in constructing a theory of insurance decision-making to explain behavior that does not conform to standard economic models of choice and decision-making. Finally, the authors propose a set of prescriptive solutions for improving insurance decision-making.

Suggested Citation

  • Kunreuther, Howard & Pauly, Mark, 2006. "Insurance Decision-Making and Market Behavior," Foundations and Trends(R) in Microeconomics, now publishers, vol. 1(2), pages 63-127, April.
  • Handle: RePEc:now:fntmic:0700000002
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1561/0700000002
    Download Restriction: no

    Citations

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


    Cited by:

    1. Schmidt, Ulrich, 2012. "Insurance demand and prospect theory," Kiel Working Papers 1750, Kiel Institute for the World Economy (IfW).
    2. Lorilee A. Medders & Charles M. Nyce & J. Bradley Karl, 2014. "Market Implications of Public Policy Interventions: The Case of Florida's Property Insurance Market," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 17(2), pages 183-214, September.
    3. David H. Krantz & Howard Kunreuther, 2006. "Goals and Plans in Protective Decision Making," NBER Working Papers 12446, National Bureau of Economic Research, Inc.
    4. Jost, Peter-J., 2016. "Competitive insurance pricing with complete information, loss-averse utility and finitely many policies," Insurance: Mathematics and Economics, Elsevier, vol. 66(C), pages 11-21.
    5. Ulrich Schmidt, 2016. "Insurance Demand Under Prospect Theory: A Graphical Analysis," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 83(1), pages 77-89, January.
    6. repec:eee:insuma:v:75:y:2017:i:c:p:137-150 is not listed on IDEAS
    7. repec:spr:nathaz:v:88:y:2017:i:1:d:10.1007_s11069-017-2863-x is not listed on IDEAS
    8. Ginger Turner & Farah Said & Uzma Afzal, 2014. "Microinsurance Demand After a Rare Flood Event: Evidence From a Field Experiment in Pakistan," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 39(2), pages 201-223, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:now:fntmic:0700000002. 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: (Alet Heezemans). General contact details of provider: http://www.nowpublishers.com/ .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.