Bray Theory Workshop
Baxter B125
Preference Types and Welfare in Insurance Markets
Levon Barseghyan,
Professor of Economics,
Cornell University,
This paper builds a procedure to partially identify and estimate the share of households that conform to various models of decision making under uncertainty – such as probability weighting, reference dependent loss aversion, and standard expected utility – and uses the estimated decision types and preferences to measure welfare implications of salient interventions in insurance markets. The procedure leverages advances in random set theory to overcome typical identification concerns that arise when households' decisions are consistent with multiple types of rational behavior. It is computationally tractable and informative about both the underlying preference structure and the shares of various decision types.
For more information, please contact Barbara Estrada by phone at 626-395-4083 or by email at [email protected].
Event Series
Bray Theory Workshops