Behavioral lab experiments have uncovered a wealth of evidence that people do not approach risk in accord with economics's workhorse theory of "expected utility". For example, in Peru, it was found that demand tripled with "simple" contract reformulation that should have not mattered from a standard expected utility perspective. So the next question to investigate is what other insights from behavioral economics may help us understand design of and demand for agricultural index insurance.
This presentation is based on the AMA Innovation Lab projects for the BASIS AMA CRSP/I4 Index Insurance Innovation Initiative Technical Committee Meeting. This event was a gathering of researchers and stakeholders involved with the Index Insurance Innovation Initiative (I4) at UC Davis.
This presentation took place at George Washington University, United States on November 6, 2014.