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Mathias Kifmann, Kerstin Roeder and Clarissa Schumacher
 
''A note on quasi-hyperbolic discounting, risk aversion, and the demand for insurance''
( 2014, Vol. 34 No.2 )
 
 
We show that quasi-hyperbolic discounting not only affects savings decisions but also the demand for insurance. In general, insurance demand by quasi-hyperbolic discounters is time-inconsistent. Without liquidity constraints they buy more insurance than initially planned. In the presence of binding liquidity constraints, hyperbolic discounters tend to revise their insurance demand downwards.
 
 
Keywords: Insurance demand, quasi-hyperbolic discounting, liquidity constraints, risk aversion
JEL: D1 - Household Behavior: General
D9 - Intertemporal Choice and Growth: General
 
Manuscript Received : Feb 07 2014 Manuscript Accepted : Apr 23 2014

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