BE CAUTIOUS IN THE LAST MONTH: THE SUNK COST FALLACY HELD BY CAR INSURANCE POLICYHOLDERS
成果类型：
Article
署名作者：
Ma, Chao
署名单位：
Xiamen University; Xiamen University
刊物名称：
INTERNATIONAL ECONOMIC REVIEW
ISSN/ISSBN：
0020-6598
DOI：
10.1111/iere.12512
发表日期：
2021
页码：
1199-1236
关键词：
摘要：
Investigating a unique large data set, we find that automobile insurance policyholders are more likely to encounter accidents during the last month of the insurance policy term than during any other month. Our interpretation is that this effect is driven by the sunk cost fallacy held by policyholders, which exacerbates their moral hazard. The explanation is that in the last month, policyholders may become concerned that they may waste the premiums paid upfront if they have not encountered an accident before the policy expires; thus, they will reduce their accident-prevention efforts, although the premiums are sunk costs and cannot be reversed.
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