publication . Article . 2001

The Valuation of Insurance under Uncertainty: Does Information about Probability Matter?

Maffioletti, A.; Mauro, C. DI;
Open Access
  • Published: 01 Jan 2001 Journal: The Geneva Papers on Risk and Insurance Theory, volume 26, issue 3 December, pages 195-224
  • Publisher: Kluwer Academic Publishers / Massachusetts:PO Box 358, Accord Station:Hingham, MA 02018:(617)871-6600
Abstract
In a laboratory experiment we test the hypothesis that consumers' valuation of insurance is sensitive to the amount of information available on the probability of a potential loss. In order to test this hypothesis we simulate a market in which we elicit individuals' willingness to pay to insure against a loss characterised either by known or else vague probabilities. We use two distinct treatments by providing subjects with different information over the vague probabilities of loss. In general we find that uncertainty about probabilities has a weak impact on consumers' valuation of insurance. However, additional information about probabilities tends to marginall...
Subjects
free text keywords: Insurance; Uncertainty; Gains; Losses
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publication . Article . 2001

The Valuation of Insurance under Uncertainty: Does Information about Probability Matter?

Maffioletti, A.; Mauro, C. DI;