Black swan protection: an experimental investigation

Morone, Andrea and Ozdemir, Ozlem (2012): Black swan protection: an experimental investigation.

Abstract

This experimental study investigates insurance decisions in low-probability, high-loss risk situations. Results indicate that subjects consider the probability of loss (loss size) when they make buying decisions (paying decisions). Most individuals are risk averse with no specific threshold probability.

• Item Type: MPRA Paper
• Language: English
• Keywords: Black swan; Risk, Insurance; Low probability; High loss; Experiment
• Subjects: D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C91 - Laboratory, Individual Behavior

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