Overconfidence nelle decisioni assicurative

The principle of insurance is simple: by taking out insurance and paying a premium each year you can avoid having to pay an unforeseen cost that is impossible to estimate and which you might not be able to pay in an unexpected event. But what are the factors that can influence the choice of insurance coverage and how much does the subjectivity guide these choices? In this thesis I decided to tackle a topic that is extremely relevant in insurance choices, that is the presence of overconfidence when an individual selects an insurance product. After an historical digression on the birth of insurance that goes from the Hammurabi code to the present day, I am going to discuss about the criteria an insurance choice can focus on. In the central part I introduce a simple model in which overconfidence arises from "correlation neglected". The individual infers her "quality" from past signals, but underestimate correlation. This leads to overconfidence and affects optimal insurance. Accordingly the two possible scenarios become: the individual takes a decision without overconfidence and the individual takes a decision under overconfidence. Finally, the last part is a brief explanation of the impact that overconfidence has on the market: in particular I will explain the market equilibrium with and without overconfidence, distinguish among small, intermediate and large overconfidence.