In a series of experiments, economically sophisticated subjects, including professional actuaries, priced insurance both as consumers and as firms under conditions of ambiguity. Findings support implications of the Einhorn-Hogarth ambiguity model: (1) for low probability-of-loss events, prices...

We review 74 experiments with no, low, or high performance-based financial incentives. The modal result is no effect on mean performance (though variance is usually reduced by higher payment). Higher incentive does improve performance often, typically judgment tasks that are responsive so better...

This paper investigates a multiple-period level premium insurance policy equilibrium in a model in which loss probabilities increase for a fixed time period for a set of persons buying insurance in a group. We show that a level-premium sequence which induces risk averse persons to become and...

The article addresses the question of whether responsibility for pollution created in the past should be retroactively applied to firms, or if the costs of cleaning up existing pollution should be financed by the public. We show that making firms liable for retrospective environmental costs can...