Huang R.J.Shih P.-T.Tzeng L.Y.2019-07-222019-07-2220121554964Xhttps://scholars.lib.ntu.edu.tw/handle/123456789/414433This paper studies the optimal insurance contract under disappointment theory. We show that, when the individuals anticipate disappointment, there are two types of optimal insurance contract. The first type contains a deductible and a coinsurance above the deductible. We find that zero marginal cost is just a sufficient but not a necessary condition for a zero deductible. The second type has no deductible and the optimal insurance starts with full coverage for small losses and includes a coinsurance above an upper value of the full coverage. ? 2012 The International Association for the Study of Insurance Economics.coinsurancedeductibledisappointmentoptimal insurance contractreview10.1057/grir.2012.2https://www.scopus.com/inward/record.uri?eid=2-s2.0-84865784838&doi=10.1057%2fgrir.2012.2&partnerID=40&md5=b1a0ddbb5fa7cdf925f184399f02936b2-s2.0-84865784838https://www.scopus.com/inward/record.uri?eid=2-s2.0-84865784838&doi=10.1057%2fgrir.2012.2&partnerID=40&md5=b1a0ddbb5fa7cdf925f184399f02936b