Understanding the advice of commissions-motivated agents
Subtitle: evidence from the Indian life insurance market
By: Santosh Anagol, Shawn Cole, Shayak Sarkar
Contributors: Cole, Shawn; Sarkar, Shayak; Harvard Business School
Series: Working paper / Harvard Business School -- 12-055; Working paper (Harvard Business School) -- 12-055
Publisher: Harvard Business School
Published: 2013
Place of publication: Boston]
Language: eng
Number of pages: 45
Work titles: Understanding the incentives of commissions motivated agents
Description: We conduct a series of field experiments to evaluate the quality of advice provided by life insurance agents in India. Agents overwhelmingly recommend unsuitable, strictly dominated products, which provide high commissions to the agent. Agents cater to the beliefs of uninformed consumers, even when those beliefs are wrong. We test whether regulation or the market can improve advice. A natural experiment requiring disclosure of commissions for a specific product results in agents recommending alternative products with high commissions but no disclosure requirement. Market discipline does generate de-biasing, with agents perceiving greater competition more likely to recommend a suitable product.
Notes: "January 2012. (Revised March 2013.)" -- Publisher's website.

Revision of Understanding the incentives of commissions motivated agents: theory and evidence from the Indian life insurance market.

Includes bibliographical references (pages 34-37).