Flood insurance demand and probability weighting: The influences of regret, worry, locus of control and the threshold of concern heuristic

Low-lying densely populated areas can be susceptible to flooding due to extreme river discharges. Insurance may be used to spread flood risk and reduce potential material damages. However, homeowners often purchase insufficient amounts of insurance against natural hazard risks like flooding, which may be due to the way they process probabilities. A common finding from (Cumulative) Prospect Theory is that individuals over-weight low probabilities...