UNEMPLOYED BUT OPTIMISTIC: OPTIMAL INSURANCE DESIGN WITH BIASED BELIEFS

The editor in charge of this paper was George-Marios Angeletos.

Acknowledgments: I would like to thank the editor George-Marios Angeletos and three referees for their valuable comments and suggestions. I also thank David Autor, Douglas Bernheim, Tim Besley, Arthur Campbell, Raj Chetty, Stefano DellaVigna, Mathias Dewatripont, Geert Dhaene, Peter Diamond, Florian Ederer, Jesse Edgerton, Laura Feiveson, Tal Gross, Jonathan Gruber, Bengt Holmstrom, Henrik Kleven, Camille Landais, Robert Shimer, Frans Spinnewyn, Jean Tirole, Ivan Werning, Maurizio Zanardi, and seminar participants at MIT, Toulouse School of Economics, Tilburg University, Stanford University, Wharton School, Harvard KSG, Chicago Booth, University College London, London School of Economics, INSEAD, UCLouvain, Maastricht University, Tinbergen Institute, Harvard University, Bonn University, Oxford University, Paris School of Economics, UC Berkeley, UC Davis, ECARES, Hebrew University, Tel Aviv University, IIES, the CEPR PP Sypmosium, the SITE summer workshop, the CESifo and EEA-ESEM meetings for helpful comments and discussions. Spinnewijn is a Research Affiliate at CEPR.