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dc.contributor.authorSchumacher, Heineren_US
dc.contributor.authorKesternich, Irisen_US
dc.description.abstractWe develop an insurance market model where consumers (i) exhibit present-biased preferences, and (ii) suffer from physical pain in case of (health-) damage. They can exert preventive effort to reduce the probability of damage. Sophisticated consumers correctly anticipate their effort and purchase full insurance. Naive consumers overestimate their future effort, purchase no insurance and end up with less effort than sophisticated ones. We allow consumers to differ in their wealth and risk preferences. Our model can explain why in some insurance markets there is a negative correlation between risk and insurance and a positive correlation between insurance and wealth.en_US
dc.publisherVerein für Socialpolitik Frankfurt a. M.en_US
dc.relation.ispartofseriesBeiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Asymmetric Information and Risk C8-V1en_US
dc.subject.keywordInsurance Markets, Moral Hazard, Hyperbolic Discounting, Sophisticationen_US
dc.titlePain, Precautions and Present-biased Preferences: A Theory of Health Insuranceen_US
dc.typeConference Paperen_US
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie

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