Using your knowledge of behavioral economics, explain why many people choose to have low deductibles on their automobile insurance policies. Suppose that you are advising the Department of Energy on...

Using your knowledge of behavioral economics, explain why many people choose to have low deductibles on their automobile insurance policies.

Suppose that you are advising the Department of Energy on the best way to reduce energy consumption through home insulation. It has offered individuals a tax credit based on the magnitude of the payments made to install additional insulation in the attic, but the tax credit program has had only limited success. It has been asked to consider subsidizing insulation companies for a portion of the cost of clearing attics of unwanted items. Using your understanding of behavioral economics and public policy, analyze the pros and cons of the attic clearing program.