| Article ID: | iaor19992590 |
| Country: | Netherlands |
| Volume: | 106 |
| Issue: | 1 |
| Start Page Number: | 39 |
| End Page Number: | 44 |
| Publication Date: | Apr 1998 |
| Journal: | European Journal of Operational Research |
| Authors: | Dimitriyadis Irini, Tekta Arzu |
| Keywords: | behaviour |
The aim of the paper is to examine the relation between the type of bonus–malus system, accident frequency and the decision process of the insureds in auto-insurance, and show that there can be no unique heuristic rule which holds true for various bonus–malus systems and accident causing propensities. A budget-constrained mechanism is introduced to explain possible external effects on the decision of the insureds.