Arbeitspapier
How Do Consumers Choose Health Insurance? – An Experiment on Heterogeneity in Attribute Tastes and Risk Preferences
Recent health policy reforms try to increase consumer choice. We use a laboratory experiment to analyze consumers' tastes in typical contract attributes of health insurances and to investigate their relationship with individual risk preferences. First, subjects make consecutive insurance choices varying in the number and types of contracts offered. Then, we elicit individual risk preferences according to Cumulative Prospect Theory. Applying a latent class model to the choice data, reveals five classes of consumers with considerable heterogeneity in tastes for contract attributes. From this, we infer distinct behavioral strategies for each class. The majority of subjects use minimax strategies focusing on contract attributes rather than evaluating probabilities in order to maximize expected payoffs. Moreover, we show that using these strategies helps consumers to choose contracts, which are in line with their individual risk preferences. Our results reveal valuable insights for policy makers of how to achieve efficient consumer choice.
- ISBN
-
978-3-86788-614-7
- Language
-
Englisch
- Bibliographic citation
-
Series: Ruhr Economic Papers ; No. 537
- Classification
-
Wirtschaft
Design of Experiments: Laboratory, Individual
Health Insurance, Public and Private
Criteria for Decision-Making under Risk and Uncertainty
- Subject
-
health insurance
risk preferences
heterogeneity
heuristics
laboratory experiment
cumulative prospect theory
- Event
-
Geistige Schöpfung
- (who)
-
Kairies-Schwarz, Nadja
Kokot, Johanna
Vomhof, Markus
Wessling, Jens
- Event
-
Veröffentlichung
- (who)
-
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
- (where)
-
Essen
- (when)
-
2014
- DOI
-
doi:10.4419/86788614
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Kairies-Schwarz, Nadja
- Kokot, Johanna
- Vomhof, Markus
- Wessling, Jens
- Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
Time of origin
- 2014
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How Do Consumers Choose Health Insurance? – An Experiment on Heterogeneity in Attribute Tastes and Risk Preferences
How Consumers Choose Hearing Aid Brands
Measuring consumers' preferences for craft beer attributes through Best-Worst Scaling
Do consumers choose the right credit contracts?
Do consumers choose the right credit contracts?
What attributes of extra virgin olive oil are really important for consumers: a meta-analysis of consumers' stated preferences
Informing Consumers about their own Preferences
Informing Consumers about their own Preferences
What do consumers consider before they choose? Identification from asymmetric demand responses
Aggregation with price variation and heterogeneity across consumers
Team incentives under moral and altruistic preferences: Wich team to choose?