We explore the effects that optimism bias has on the demand for insurance. Our theory is based on a simple binomial … results largely support our theory, in that we find that insurance demand is increasing in wealth and decreasing in optimism … model of the demand for insurance in which consumers make optimistically biased assessments concerning the likelihood of …

We study the value of and the demand for instrumentally-valuable information in a simple decision environment where … information rarely end up buying polarized signals and instead overwhelmingly opt for diverse information. The demand for diverse …

the distinction bias. The present research also specifies when the distinction bias occurs and when it does not. This …

We study optimal insurance demand for a risk- and ambiguity-averse consumer under ambiguity about contract … nonperformance. Ambiguity aversion lowers optimal insurance demand and the consumer's degree of ambiguity aversion is negatively … optimal demand for insurance, and we determine sufficient conditions for a negative effect. We also discuss wealth effects and …

bias, and endowment effect. This paper builds a new theory of revealed preference capturing preferences that depend on a …) into three independent axioms. Referential revealed preference theory is then, naturally, constructed by only removing the … behavioral anomalies, preserves the predictive power of the classical theory to the extent possible. Therefore, all sensible …

evidence on how household income affects demand for warranties. The adapted model rationalizes a strong aversion to deductibles …

Although gambling is primarily an economic activity, no single theory of the demand for gambles has gained wide …-spread acceptance among economists. This paper proposes a simple model of the demand for gambling that is based on the standard economic …

. 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 …

free from substitution and income bias, using estimated ordinary demand functions without postulating a specific structure …The U.S. CPI is based on the Laspeyres price index, an index type that has an upward "substitution bias." Thus, the CPI … tends to overstate increases in the cost of living. To address this bias, the Advisory Commission to Study the Consumer …