Trust and Insurance Contracts

Abstract We assemble homeowner insurance claims from 28 independently operated country subsidiaries of a multinational firm. propose new model, in which consumers can make invalid and firms deny valid claims, as is common the data. In trust honesty shape equilibrium contracts, disputes, claim payments, especially when disputes are too small for courts. test model by investigating incidence, dispute, rejection, payment, well costs pricing across countries. The evidence consistent with centrality markets, our predicts. Authors have furnished data/code, available on Oxford University Press Web site next to link final published paper online.