RT info:eu-repo/semantics/article T1 An agent-based model of rational optimism A1 Gutiérrez Díez, Pedro José K1 Agent-based stochastic model K1 Dynamical optimisation in economics K1 General equilibrium model K1 Arrow-Debreu securities K1 Subjective probabilities K1 Rationality K1 Optimism bias K1 Game theory AB We prove that, in standard insurance markets, rational agents havean incentive to choose as subjective probabilities those incurring in anoptimism bias, since they imply real and objective net gains. Our agent-basedmodel of insurance markets thus clarifies how rational optimism naturallyappears and persists in insurance markets, opening up the possibility to explainthe optimism bias observed in other environments on the basis of the theory ofsalient perturbations. Our findings are consistent with the empirical evidenceshowing a systematic and coherent moderate optimism bias of agents in theassessment of probabilities. PB Inderscience SN 1466-8297 YR 2018 FD 2018 LK http://uvadoc.uva.es/handle/10324/37803 UL http://uvadoc.uva.es/handle/10324/37803 LA spa NO International Journal of Risk Assessment and Management, 2018 Vol.21 No.3, pp.155 - 183 DS UVaDOC RD 29-mar-2024