. We derive new theoretical results on the effects of probability weighting in the context of common insurance demand … comparative statics. In a binary-risk model, probability weighting predicts higher demand than EU alone, explaining commonly …-impact risks or for insurance contracts exposed to nonperformance risk …

Choosing solutions under risk and uncertainty requires the consideration of several factors. One of the main factors in … choosing a solution is modeling the decision maker's attitude to risk. The expected utility theory was the first approach that … allowed to correctly model various nuances of the attitude to risk. Further research in this area has led to the emergence of …