Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry

Insurance and Behavioral Economics: Improving Decisions in the Most Misunderstood Industry

RFF Academic Seminar

Presenters
Howard Kunreuther, Co-Director of Wharton Risk Management and Decision Processes Center
Wharton School, University of Pennsylvania 

Abstract
Key stakeholders often do not make informed decisions with respect to protection against extreme events. The concepts of System 1 and System 2 behavior that are the cornerstones of Daniel Kahneman’s book Thinking, Fast and Slow, highlight how interested parties (consumers, insurers and regulators) exhibit systematic biases and utilize simplified heuristics in making insurance-related decisions.  Our research suggests ways to encourage protective behavior with respect to low-probability high-consequence events in advance of the next disaster, including guiding principles for insurance.  I then evaluate the 2012 Congressional legislation that modified the National Flood Insurance Program in significant ways within the framework of the guiding principles for insurance.

Date
Thursday, March 7, 2013
12:00 - 1:30 p.m. Lunch will be provided. Location
7th Floor Conference Room
1616 P St. NW
Washington, DC 20036 All seminars will be in the 7th Floor Conference Room at RFF, 1616 P Street NW. Attendance is open, but involves pre-registration no later than two days prior to the event. For questions and to register to an event, please contact Khadija Hill at [email protected] (tel. 202-328-5174). Updates to our academic seminars schedule will be posted at www.rff.org/academicseminarseries.