Spending induced by health insurance is often called moral hazard and definitionally assumed to be inefficient. We adapt standard models and show that for those living "hand-to-mouth", the financing benefits of insurance cause a portion of moral hazard to be efficient. Although insurance's price...

Can measured risk attitudes and associated structural models predict insurance demand? In an experiment (n = 1,730), we elicit measures of utility curvature, probability weighting, loss aversion, and preference for certainty and use them to parameterize seventeen common structural models (e.g.,...

Personal decisions about health hazards are the main cause of impaired health and premature death. People smoke and eat too much and exercise too little. The lack of preventive efforts is surprising given their proven effectiveness. Arrow's (1963) classical paper suggested that moral hazard...

How does risk aversion change in wealth? To answer this question, we implemented a field experiment in the form of a free-to-play mobile game. Players made lottery choices at various points in the game and at different levels of in-game wealth. Since the game was designed as a closed economic...

Can measured risk attitudes and associated structural models predict insurance demand? In an experiment (n = 1,730), we elicit measures of utility curvature, probability weighting, loss aversion, and preference for certainty and use them to parameterize seventeen common structural models (e.g.,...

We analyze insurance demand experiments conducted in two different settings: in-person at a university laboratory and online using Amazon's Mechanical Turk crowdworking platform ("MTurk"). Subject demographics differ significantly across the samples, but average insurance demand is similar....