We study multivariate prevention decisions by disentangling early and late prevention. We show how the modularity of prevention and several measures of prevention efficiency interact with the agent’s risk attitude. We derive comparative statics with respect to impatience, loss severity, and...

This paper studies long-term private health insurance (PHI) in Germany. It describes the main actuarial principles of premium calculation and relates these to existing theory. In the German PHI policyholders do not commit to renewing their insurance contracts, but insurers commit to offering...

When risks are interdependent, an agent's decision to self-protect affects the loss probabilities faced by others. Due to these externalities, economic agents invest too little in prevention relative to the socially efficient level by ignoring marginal external costs or benefits conferred on...

When risks are interdependent, an agent’s decision to self-protect affects the loss probabilities faced by others. Due to these externalities, economic agents invest too little in prevention relative to the socially efficient level by ignoring marginal external costs or benefits conferred on...

1. Introduction -- 2. Risk and Risk Perception: Why we are not Rational in the Face of Risk -- 3. Expected Utility, Prospect Theory, and the Allais Paradox: Why Reference Points are Important -- 4. Confirmation Bias and Anchoring Effect: Why the First Piece of Information is Key in Negotiations...