Found 10 article(s) for author 'Insurance'

Fretting about Modest Risks Is a Mistake

Fretting about Modest Risks Is a Mistake. Matthew Rabin, Max Bazerman, April 29, 2019, “Managers often engage in risk-averse behavior, and economists, decision analysts, and managers treat risk aversion as a preference. In many cases, acting in a risk-averse manner is a mistake, but managers can correct this mistake with greater reflection. This article provides guidance on how individuals and organizations can move toward greater reflection and a more profitable aggregate portfolio of decisions. Inconsistency in risk preferences across decisions is a costly mistake for both individuals and for organizations.Link

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Behavioral Household Finance

Behavioral Household Finance, John Beshears, David Laibson, Brigitte Madrian, July 2018, Paper, “This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the classical model and explanations grounded in behavioral economics that can account for the observed patterns. This part covers five topics: consumption and savings, borrowing, payments, asset allocation, and insurance. The second part addresses interventions that firms, governments, and other parties deploy to shape household financial outcomes: education and information, peer effects and social influence, product design, advice and disclosure, choice architecture, and interventions that directly target prices or quantities.Link

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Optimal Taxation and Insurance Using Machine Learning

Optimal Taxation and Insurance Using Machine Learning. Maximilian Kasy, April 10, 2017, Paper, “How should one use (quasi-)experimental evidence when choosing policies such as tax rates, health insurance copay, unemployment benefit levels, class sizes in schools, etc.? This paper suggests an approach based on maximizing posterior expected social welfare, combining insights from (i) optimal policy theory as developed in the field of public finance, and (ii) machine learning using Gaussian process priors. We provide explicit formulas for posterior expected social welfare and optimal policies in a wide class of policy problems.Link

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CAPITAL MARKET BLIND SPOTS

CAPITAL MARKET BLIND SPOTS. Joshua Coval, Erik Stafford, October 2014, Paper. “This paper presents evidence suggesting that financial markets are susceptible to persistent mispricing in new financial insurance products. We argue that relatively sophisticated market participants often fail to notice that portfolios identified to be very safe by recently developed risk models may have state dependent risk exposures arising from sources outside of the model. This error can create a perverse market dynamic that is sustained by market forces and academic research…” Link Verified October 29, 2014

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How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment

How Does Risk Management Influence Production Decisions? Evidence from a Field Experiment. Shawn Cole, September 9, 2014, Paper. “Weather is a key source of income risk for many firms and households, particularly in emerging market economies. This paper studies how an innovative risk management instrument for hedging rainfall risk affects production decisions among a sample of Indian agricultural firms, using a randomized controlled trial approach. We find that the provision of insurance induces farmers to shift production towards higher-return but higher-risk cash crops…” Link verified August 21, 2014

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Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment

Dynamics of Demand for Index Insurance: Evidence from a Long-Run Field Experiment. Shawn Cole, May 2014, Paper, “In the past ten years, many practitioners and academics have embraced micro-insurance. Economists view risk diversification as one of the few readily available “free lunches,” and dozens of products were launched in the hopes of developing a financial service that was both welfare enhancing and economically sustainable. A successful market-based approach, however, requires consumers to make good decisions about whether to purchase products. Practically speaking, because marketing policies is expensive, sustainability may depend on high purchase and repurchase rates.Link

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The Promise of Microfinance and Women’s Empowerment: What Does the Evidence Say?

The Promise of Microfinance and Women’s Empowerment: What Does the Evidence Say? Dina Pomeranz, February 2014, Paper. “The microfinance revolution has transformed access to financial services for low-income populations worldwide. As a result, it has become one of the most talked-about innovations in global development in recent decades. However, its expansion has not been without controversy. While many hailed it as a way to end world poverty and promote female empowerment, others condemned it as a disaster for the poor…” Link

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Private Information and Insurance Rejections

Private Information and Insurance Rejections. Nathaniel Hendren, September 2013, Paper. “Across a wide set of nongroup insurance markets, applicants are rejected based on observable, often high-risk, characteristics. This paper argues that private information, held by the potential applicant pool, explains rejections. I formulate this argument by developing and testing a model in which agents may have private information about their risk. I first derive a new no-trade result that theoretically explains how private in- formation could cause rejections…” Link Verified October 12, 2014

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Sustainability in Financial Services Is Not About Being Green

Sustainability in Financial Services Is Not About Being Green. George Serafeim, May 15, 2013, Opinion. “The next time we hear about a bank or insurance company’s “green program” — like using energy efficient light bulbs or operating out of a LEED Platinum building — we’ll either scream or throw up. Don’t get us wrong. We aren’t “climate change deniers” and we believe that every individual and organization should use energy and other natural resources responsibly. Our problem with banks, insurance companies, and other financial institutions that tout their commitment to sustainability by…” Link Verified October 11, 2014

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Labor Regulations and European Venture Capital

Labor Regulations and European Venture Capital. William R. Kerr, January 2013, Paper. “European nations substitute between employment protection regulations and labor market expenditures (e.g., unemployment insurance benefits) for providing worker insurance. Employment regulations more directly tax firms making frequent labor adjustments than other labor market insurance mechanisms. Venture capital investors are especially sensitive to these labor adjustment costs. Nations favoring labor market expenditures as the mechanism for providing worker insurance developed stronger venture capital markets over 1990–2008, especially in high volatility sectors…” Link Verified October 11, 2014

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