Contract design and insurance fraud : an experimental investigation

Schiller, Jörg; Lammers, Frauke

Contract design and insurance fraud : an experimental investigation

dc.contributor.author	Schiller, Jörg	de
dc.contributor.author	Lammers, Frauke	de
dc.date.accessioned	2024-04-08T08:44:13Z
dc.date.available	2024-04-08T08:44:13Z
dc.date.created	2010-07-23
dc.date.issued	2010
dc.description.abstract	This paper investigates the impact of insurance contract design on the behavior of filing fraudulent claims in an experimental setup. We test how fraud behavior varies for insurance contracts with full coverage, a straight deductible or variable premiums (bonus-malus contract). In our experiment, filing fraudulent claims is a dominant strategy for selfish participants, with no psychological costs of committing fraud. While some people always commit fraud, a substantial share of people only occasionally or never defraud. In addition, we find that deductible contracts may be perceived as unfair and thus increase the extent of claim build-up compared to full coverage contracts. In contrast, bonus-malus contracts with variable insurance premiums significantly reduce the filing of fictitious claims compared to both full coverage and deductible contracts. This reduction cannot be explained by monetary incentives. Our results indicate that contract design significantly affects psychological costs and, consequently, the extent of fraudulent behavior of policyholders.	en
dc.identifier.swb	326801405
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/5372
dc.identifier.urn	urn:nbn:de:bsz:100-opus-4879
dc.language.iso	eng
dc.relation.ispartofseries	FZID discussion papers; 19
dc.rights.license	publ-ohne-pod	en
dc.rights.license	publ-ohne-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_ubh.php
dc.subject	Insurance fraud	en
dc.subject	Experiment	en
dc.subject	Fairness	en
dc.subject	Contract design	en
dc.subject	Deductible	en
dc.subject	Bonus-malus	en
dc.subject.ddc	330
dc.subject.gnd	Versicherungsbetrug	de
dc.subject.gnd	Vertrag	de
dc.title	Contract design and insurance fraud : an experimental investigation	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.export.bibtex	@techreport{Schiller2010, url = {https://hohpublica.uni-hohenheim.de/handle/123456789/5372}, author = {Schiller, Jörg and Lammers, Frauke}, title = {Contract design and insurance fraud : an experimental investigation}, year = {2010}, school = {Universität Hohenheim}, series = {FZID discussion papers}, }
local.export.bibtexAuthor	Schiller, Jörg and Lammers, Frauke
local.export.bibtexKey	Schiller2010
local.export.bibtexType	@techreport
local.faculty.number	3	de
local.faculty.number	7	de
local.institute.number	530alt	de
local.institute.number	795	de
local.opus.number	487
local.series.issueNumber	19
local.series.title	FZID discussion papers
local.university	Universität Hohenheim	de
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.faculty	Landesanstalten	de
local.university.institute	Institut für Haushalts- und Konsumökonomik (bis 2010)	de
local.university.institute	Forschungszentrum Innovation und Dienstleistung	de

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