Affective Decision Making in Insurance Markets

This paper suggests incorporating affective considerations into decision-making theory and insurance decision in particular. It describes decision maker with two internal accounts - the rational account and the mental account. The rational account decides on insurance to maximize expected (perceived) utility, while the mental account chooses risk perceptions, which then affect the perceived expected utility. The two accounts interact to reach a decision, which is composed of both risk perception and insurance level.

Provided by: Yale University Topic: Software Date Added: Jun 2004 Format: PDF

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