This paper investigates whether and how the crowding-out effect of formal insurance on informal risk sharing is mitigated by social preference change. We design a lab experiment in which formal insurance is introduced and removed unexpectedly in a repeated risk-sharing game. We find evidence of...

There is a recent debate on whether prospect theory can explain the disposition effect. Using both theory and simulation, this paper shows that prospect theory often predicts the disposition effect when lagged expected final wealth is the reference point, regardless of whether the reference...

The literature has mixed results on how formal insurance affects informal risk sharing. Whether such effect is motivated extrinsically or intrinsically also remains unclear. We design a lab experiment in which formal insurance is introduced and removed unexpected and the insurance purchase...

The overuse of medical services including antibiotics is often blamed on Physician Induced Demand. But since this theory is about physician motivations, it is difficult to test. We conduct an audit study in which physician financial incentives, beliefs about what patients want, and desires to...