IDEAS home Printed from https://ideas.repec.org/p/eve/wpaper/23-01.html
   My bibliography  Save this paper

What if compulsory insurance triggered self-insurance? An experimental evidence

Author

Listed:
  • Anne Corcos

    (CURAPP-ESS UMR 7319, CNRS and Université de Picardie Jules Verne)

  • François Pannequin

    (CEPS, ENS Paris-Saclay and University of Paris-Saclay)

  • Claude Montmarquette

    (Cirano and Université de Montréal)

Abstract

Although it avoids the negative externalities associated with the damages caused by uninsured individuals, compulsory insurance raises the issue of insurance crowding out prevention. Interestingly, Pannequin and Corcos ((2020)) show that on a theoretical level, although compulsory insurance and self-insurance (prevention investments dedicated to loss reduction) are substitutes for risk averters, they are complementary for risk lovers. The present contribution aims to test, in the Lab, these surprising results using a model-based experimental design. Our experimental results support the theoretical predictions: compulsory insurance and self-insurance are complementary for risk lovers and substitutes for risk averters. This contribution fully supports public policies that aim to implement mandatory insurance. Far from deterring prevention activities and providing that its level is high enough, mandatory insurance increases prevention levels.

Suggested Citation

  • Anne Corcos & François Pannequin & Claude Montmarquette, 2023. "What if compulsory insurance triggered self-insurance? An experimental evidence," Documents de recherche 23-01, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:23-01
    as

    Download full text from publisher

    File URL: https://www.univ-evry.fr/fileadmin/mediatheque/ueve-institutionnel/03_Recherche/laboratoires/Epee/pub/WorkingPapers_CEPS_1.pdf
    Download Restriction: no
    ---><---

    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:eve:wpaper:23-01. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Samuel Nosel (email available below). General contact details of provider: https://edirc.repec.org/data/epevrfr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.