We experimentally analyze consumers’ reactions to insurance default risk. Consistent Blazer Nike with earlier studies, we find that insurance with default risk is extremely unattractive to most individuals. A considerable fraction of consumers completely refuse to accept any default risk; others ask for large Chaussure Nike Blazer Noir reductions in insurance premiums. These findings are robust against several variations of the setup: probability representations (verbal and numeric), reasons for default (insolvency and claim settlement practices), framing (positively and negatively expressed probability of default), and comparisons between the policy’s level of default and that of an alternative (default free and small default risk). The major driver of willingness to pay is level of security concern and decisions are sensitive to the default probability. All other effects on willingness to pay are unsystematic.
A dynamic macromodel is employed to discuss the feasibility of the mixed economy in the long term. There are two sectors, state and private. Both accumulate capital, but, when profits are high and private sector demand for assets is strong, the state privatizes a fraction of its capital stock. Privatization reduces the growth of the money supply and increases the real wage. This reduces the incentive to the private sector to purchase state assets. Both stable and unstable patterns of growth are possible depending upon the responsiveness of the privatization function to profitability. It is seen that so long as the state remains a major player in the economy, private sector investment not coordinated with state Acheter Nike Blazer Vintage Femme accumulation may well be counterproductive to a transition to a mixed economy. J. Comp. Econom. March 1993, 17(1 ), pp. 1-22. University of Notre Dame, Notre Dame, Indiana 46556.
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