Coinsurance has differentiated effects that likely interact with financial constraints. We measure coinsurance of multi-segment firms using Granger causality between CDS spread-implied default risks of single-segment firms. Higher coinsurance results on average in lower cost of debt, higher...

Current decision-making models assume that an individual's attitude towards risk does not vary across different sources. A decision maker's processing of known probabilities and the resulting degree of probability weighting should therefore be unique. This paper provides evidence that challenges...