Comparative Statics of Disclosure Statements

• 成果类型: Article
• 署名作者: Burkovskaya, Anastasia; Li, Jian
• 署名单位: University of Sydney; Iowa State University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4742
• 发表日期: 2024
• 页码: 1410-1427
• 关键词: framing effect; Narrow bracketing; weakly separable preferences; insurance demand; information design

摘要

Financial companies often use disclosure statements (DSs) to categorize uncertain contingencies into different sections (e.g., a health insurance plan includes sections such as hospital coverage and dental coverage). We model DSs as information partitions of the state space, which influence how a consumer perceives her choice problem and how she makes her demand decisions. We study a consumer with weakly separable preferences, which allows us to define event-risk attitude to the DS's categories. Our main results show that aggregating the more expensive events into a coarser DS decreases a firm's profit if and only if the consumer is event-risk averse. The opposite result holds for event-risk loving. Our findings can be extended to a more general class of consumer preferences and provide insights into the optimal design of DSs.