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| Mathias Kifmann, Kerstin Roeder and Clarissa Schumacher |
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| ''A note on quasi-hyperbolic discounting, risk aversion, and the demand for insurance'' |
| ( 2014, Vol. 34 No.2 ) |
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| 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. |
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| Keywords: Insurance demand, quasi-hyperbolic discounting, liquidity constraints, risk aversion |
JEL: D1 - Household Behavior: General
D9 - Intertemporal Choice and Growth: General |
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| Manuscript Received : Feb 07 2014 | | Manuscript Accepted : Apr 23 2014 |
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