A behavioral model of the adoption of protective activities

摘要: Abstract Considerable empirical evidence suggests that individuals are unwilling to protect themselves against low probability-high loss events even if the costs of protection subsidized. This behavior has been difficult rationalize using traditional expected utility model. paper proposes a model adoption protective activities which emphasizes importance interpersonal communication and past experience. The time path an equilibrium rate is characterized. Properties shed light on reasons for usage seat belts limited purchase federally subsidized flood insurance.