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Di Tillio, Alfredo; Kos, Nenad; Messner, Matthias - 2014

This paper explores the sale of an object to an ambiguity averse buyer. We show that the seller can increase his profit by using an ambiguous mechanism. That is, the seller can benefit from hiding certain features of the mechanism that he has committed to from the agent. We then characterize the...

Persistent link: https://www.econbiz.de/10010399062

Estimating individual ambiguity aversion : a simple approach

Genîzî, Ûrî; Imas, Alex; List, John A. - 2015

We introduce a simple, easy to implement instrument for jointly eliciting risk and ambiguity attitudes. Using this instrument, we structurally estimate a two-parameter model of preferences. Our findings indicate that ambiguity aversion is significantly overstated when risk neutrality is assumed....

Persistent link: https://www.econbiz.de/10010483592

Ambiguity aversion is the exception

Kocher, Martin; Lahno, Amrei Marie; Trautmann, Stefan T. - 2015

An extensive literature has studied ambiguity aversion in economic decision making, and how ambiguity aversion can account for empirically observed violations of expected utility-based theories. Almost all relevant applied models presume a general dislike of ambiguity. In this paper, we provide...

Persistent link: https://www.econbiz.de/10010496989

Selling to the mean

Kos, Nenad; Messner, Matthias - 2015

We study optimal selling strategies of a seller who is poorly informed about the buyer’s value for the object. When the maxmin seller only knows that the mean of the distribution of the buyer's valuations belongs to some interval then nature can keep him to payoff zero no matter how much...

Persistent link: https://www.econbiz.de/10011298549

Econographics

Chapman, Jonathan; Dean, Mark; Ortoleva, Pietro; … - 2018

We study the pattern of correlations across a large number of behavioral regularities, with the goal of creating an empirical basis for more comprehensive theories of decision-making. We elicit 21 behaviors using an incentivized survey on a representative sample (n = 1;000) of the U.S....

Persistent link: https://www.econbiz.de/10011897575

A theory of experimenters

Banerjee, Abhijit V.; Chassang, Sylvain; Montero, Sergio; … - 2017

This paper proposes a decision-theoretic framework for experiment design. We model experimenters as ambiguity-averse decision-makers, who make trade-offs between subjective expected performance and robustness. This framework accounts for experimenters' preference for randomization, and clarifies...

Persistent link: https://www.econbiz.de/10011735910

On the psychological foundations of ambiguity and compound risk aversion

Wu, Keyu; Fehr, Ernst; Hofland, Sean; Schonger, Martin - 2024

Ambiguous prospects are ubiquitous in social and economic life, but the psychological foundations of behavior under ambiguity are still not well understood. One of the most robust empirical regularities is the strong correlation between attitudes towards ambiguity and compound risk which...

Persistent link: https://www.econbiz.de/10014551421

Analysing the determinants of credit risk for General Insurance firms in the UK

Caporale, Guglielmo Maria; Cerrato, Mario; Zhang, Xuan - 2016

This paper estimates a reduced-form model to assess the credit risk of General Insurance (GI) non-life firms in the UK … insurance firms. The implications of these findings for regulators of GI firms under the coming Solvency II are discussed. …

Persistent link: https://www.econbiz.de/10011497884

Insurance in human capital models with limited enforcement

Krebs, Tom; Kuhn, Moritz; Wright, Mark L. J. - 2016

-free physical capital and risky human capital. Households have access to a complete set of credit and insurance contracts, but their … households less than half of human capital risk is insured and the welfare losses due to the lack of insurance range from 3 … parameters have non-negligible effects on equilibrium insurance and welfare, but the result that young households are severely …

Persistent link: https://www.econbiz.de/10011500171

Assessing the efficiency of an insurance provider : a measurement error approach

Jametti, Mario; Ungern-Sternberg, Thomas von - 2003

The purpose of this paper is to compare the cost efficiency of private and public property insurance providers in … measurement errors and apply the model to a data set on 19 firms in housing insurance markets in Switzerland. We show that the … public insurance providers are about 20 per cent more cost efficient than their private counterparts. …

Persistent link: https://www.econbiz.de/10011507834