can you explain to me how seut theory and prospect theory can explain why individuals are reluctant to purchase insurance against high loss/low prob events??
can disasters be framed positively??
2007-01-23 20:29:26 · 2 answers · asked by T P 2 in Business & Finance ➔ Insurance
It is human nature to disregard events with low probabilities, even if they have serious consequences.
It probably has something to do with the pattern forming natures of our brains - the low probabilities don't get a chance to form a pattern.
2007-01-24 04:26:02 · answer #1 · answered by Piet Strydom 3 · 0⤊ 0⤋
The best way to sell disaster coverage is to play up on the fear bit. I don't think it's ethical, but that's how you do it.
People want value for their money, and they expect the government to step in and "fix" things for them, in case of a large disaster. Can you believe, 18 months later, here in Houston we still have "katrina victims" wanting free rent?? That type of person is NEVER, EVER going to buy something - why buy it, when you can GUILT some politician into paying for it for free, FOREVER?
2007-01-24 01:31:54 · answer #2 · answered by Anonymous 7 · 0⤊ 0⤋