Understanding the Advice of Commissions-Motivated Agents: Evidence from the Indian Life Insurance Market

• 成果类型: Article
• 署名作者: Anagol, Santosh; Cole, Shawn; Sarkar, Shayak
• 署名单位: Harvard University; National Bureau of Economic Research; Harvard University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00625
• 发表日期: 2017-03
• 页码: 1-15
• 关键词: information; DISCRIMINATION; COMPETITION; disclosure; industry

摘要

We conduct a series of field experiments to evaluate the quality of advice provided by life insurance agents in India. Agents overwhelmingly recommend unsuitable, strictly dominated products that provide high commissions to the agent. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We also find that agents appear to focus on maximizing the amount of premiums (and therefore their commissions) that customers pay, as opposed to focusing on how much insurance coverage customers need. A natural experiment requiring disclosure of commissions for a specific product results in agents recommending alternative products with high commissions but no disclosure requirement. A follow-up agent survey sheds light on the extent to which poor advice reflects both the commission incentives and agents' limited product knowledge.