IMPACT OF OUTCOME AMBIGUITY ON SELF-INSURANCE AND SELF-PROTECTION: EXPERIMENTAL EVIDENCE

Date

2017-10-01

Author

Özdemir, Özlem

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This experimental study examines and compares individual valuations of the two risk reduction mechanisms: self-insurance and self-protection in risky versus ambiguous outcome situations. Results confirm that individuals do not perceive these mechanisms differently under risk. Moreover, ambiguity in the outcome (i.e., size of loss) affects valuations weakly, and changing representations of ambiguity do not alter valuation. In general, individuals are found to be ambiguity averse for low sizes of loss and ambiguity neutral for high sizes of loss, regardless of the probability of loss. Finally, no strong support is found for any particular model of ambiguity.

Subject Keywords

Ambiguity, Self-insurance, Self-protection

URI

https://hdl.handle.net/11511/48069

Journal

BULLETIN OF ECONOMIC RESEARCH

DOI

https://doi.org/10.1111/boer.12111

Collections

Department of Business Administration, Article

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Citation Formats

Ö. Özdemir, “IMPACT OF OUTCOME AMBIGUITY ON SELF-INSURANCE AND SELF-PROTECTION: EXPERIMENTAL EVIDENCE,” BULLETIN OF ECONOMIC RESEARCH, pp. 0–0, 2017, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/48069.