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A Proposal to Construct ``Behavioral Insurance Theory"

Author

Listed:
  • Atsushi Takao

    (Graduate School of Business Administration, Kobe University)

  • Yamasaki Takashi

    (Graduate School of Business Administration, Kobe University)

Abstract

Traditional insurance economics derives some definite conclusions using the neoclassical economics method. However, those conclusions are too abstract to explain phenomena in the real insurance market. In other words, a number of anomalies remain that are not explained by traditional insurance economics. In this paper, in order to solve this problem, we propose the development of a ``behavioral insurance theory," which is influenced by the establishment of ``behavioral finance," which in turn emerged from the field known as ``behavioral economics," and in which the analysis is less bound to subjects in the market. This proposal represents a paradigm shift in traditional insurance theory.

Suggested Citation

  • Atsushi Takao & Yamasaki Takashi, 2006. "A Proposal to Construct ``Behavioral Insurance Theory"," Discussion Papers 2006-03, Kobe University, Graduate School of Business Administration.
  • Handle: RePEc:kbb:dpaper:2006-03
    as

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    File URL: http://www.b.kobe-u.ac.jp/paper/2006_03.pdf
    File Function: First version, 2006
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    References listed on IDEAS

    as
    1. George Loewenstein & Drazen Prelec, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 573-597.
    2. Milton Friedman & L. J. Savage, 1948. "The Utility Analysis of Choices Involving Risk," Journal of Political Economy, University of Chicago Press, vol. 56, pages 279-279.
    3. Shleifer, Andrei, 2000. "Inefficient Markets: An Introduction to Behavioral Finance," OUP Catalogue, Oxford University Press, number 9780198292272.
    Full references (including those not matched with items on IDEAS)

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