Dynamic Decision Making when Risk Perception Depends on Past Experience |
| |
Authors: | Michèle Cohen Johanna Etner Meglena Jeleva |
| |
Institution: | (1) CES, University Paris1, Paris, France;(2) GAINS, University of Maine, Le Mans, France |
| |
Abstract: | The aim of the article is to propose a preferences representation under risk where risk perception can be past experience
dependent. A first step consists in considering a one-period decision problem where individual preferences are no more defined
only on decisions but on pairs (decision, past experience). The obtained criterion is used in the construction of a dynamic
choice model under risk. The article ends with an illustrative example concerning insurance demand. It appears that our model
allows to explain modifications in the insurance demand behavior over time observed on the insurance markets for catastrophic
risk and difficult to justify with standard models. |
| |
Keywords: | dynamic decision making past experience rank dependent utility model recursive model risk perception |
本文献已被 SpringerLink 等数据库收录! |