Risk Aversion and Optimal Insurance Deductibles

Hanna, S. (1989). Risk aversion and optimal insurance deductibles. American Council on Consumer Interests Proceedings, 141-147.

12 Pages Posted: 27 Jun 2015

Date Written: April 24, 1989

Abstract

Consumers face many decisions involving risk, yet some researchers claim that consumers cannot make rational decisions when risk is involved, even when full information is available. A simple normative analysis of decisions about insurance deductibles is presented. Implications for consumer education and public policy are discussed, including the need to teach consumers to choose insurance policies with higher deductibles. Possible computer expert systems to help consumers make decisions are also discussed.

Keywords: insurance, expected utility, personal finance

JEL Classification: D14, D11, D81, G22

Suggested Citation

Hanna, Sherman D., Risk Aversion and Optimal Insurance Deductibles (April 24, 1989). Hanna, S. (1989). Risk aversion and optimal insurance deductibles. American Council on Consumer Interests Proceedings, 141-147. . Available at SSRN: https://ssrn.com/abstract=2622840

Sherman D. Hanna (Contact Author)

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

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