This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 97 No. 5 (December 2007)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

Overconfidence, Insurance, and Paternalism

Article Citation

Sandroni, Alvaro, and Francesco Squintani. 2007. "Overconfidence, Insurance, and Paternalism." American Economic Review, 97(5): 1994-2004.

DOI: 10.1257/aer.97.5.1994

Abstract

It is well known that when agents are fully rational, compulsory public insurance may make all agents better off in the Rothschild and Stiglitz (1976) model of insurance markets. We find that when sufficiently many agents underestimate their personal risks, compulsory insurance makes low-risk agents worse off. Hence, behavioral biases may weaken some of the well-established rationales for government intervention based on asymmetric information. (JEL D82, G22)

Article Full-Text Access

Full-text Article

Additional Materials

Link to Appendix (168.01 KB)

Authors

Sandroni, Alvaro
Squintani, Francesco


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us