An Incentive-compatible experiment on probabilistic insurance and implications for an insurer' s solvency level

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<dc:creator>Zimmer, Anja</dc:creator>
<dc:date>2018-03-01</dc:date>
<dc:description xml:lang="es">Sumario: This article is the first to conduct an incentive-compatible experiment using real monetary payoffs to test the hypothesis of probabilistic insurance, which states that willingness to pay for insurance decreases sharply in the presence of even small default probabilities as compared to a risk-free insurance contract. In our experiment, 181 participants state their willingness to pay for insurance contracts with different levels of default risk. We find that the willingness to pay sharply decreases with increasing default risk. Our results, hence, strongly support the hypothesis of probabilistic insurance. Furthermore, we study the impact of customer reaction to default risk on an insurer¿s optimal solvency level using our experimentally obtained data on insurance demand. We show that an insurer should choose to be default-free rather than having even a very small default probability. This risk strategy is also optimal when assuming substantial transaction costs for risk management activities undertaken to achieve the maximum solvency level</dc:description>
<dc:identifier>https://documentacion.fundacionmapfre.org/documentacion/publico/es/bib/163949.do</dc:identifier>
<dc:language>spa</dc:language>
<dc:rights xml:lang="es">InC - http://rightsstatements.org/vocab/InC/1.0/</dc:rights>
<dc:subject xml:lang="es">Probabilidad de impago</dc:subject>
<dc:subject xml:lang="es">Riesgo de cumplimiento</dc:subject>
<dc:subject xml:lang="es">Comportamiento del consumidor</dc:subject>
<dc:subject xml:lang="es">Experimentos</dc:subject>
<dc:subject xml:lang="es">Solvencia</dc:subject>
<dc:subject xml:lang="es">Mercado de seguros</dc:subject>
<dc:subject xml:lang="es">Empresas de seguros</dc:subject>
<dc:subject xml:lang="es">Incumplimiento de pago</dc:subject>
<dc:type xml:lang="es">Artículos y capítulos</dc:type>
<dc:title xml:lang="es">An Incentive-compatible experiment on probabilistic insurance and implications for an insurer' s solvency level</dc:title>
<dc:relation xml:lang="es">En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/03/2018 Volumen 85 Número 1 - marzo 2018 , p. 245-273</dc:relation>
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