rebate. Insurance policies with rebates may satisfy a person’s need to collect something
on her insurance policy when she has not suffered a loss.
11.4.3A Goal-based Model of Choice
Both expected utility theory and prospect theory assume that financial considerations
determine a person’s decisions regarding insurance purchase. But people often construct
or select insurance plans designed to achieve multiple goals, not all of which are purely
financial (Krantz and Kunreuther, 2007). The relative importance of these goals varies
with the decision maker as well as the context in which the decision ...
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