Price Discrimination in Selection Markets

• 成果类型: Article
• 署名作者: Veiga, Andre
• 署名单位: Imperial College London
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01330
• 发表日期: 2025-09
• 页码: 1327-1340
• 关键词: insurance markets; adverse selection; health-insurance; welfare; INFORMATION; demand; Heterogeneity; COMPETITION; ECONOMICS; PRIVATE

摘要

Should insurance prices vary with age? I consider competitive markets for lemons where a signal (e.g., age) partitions consumers (e.g., young and old). I study the continuum of policies from zero price discrimination (zero PD, equal prices) to full PD (no restrictions). Restricting PD can increase welfare if high-cost markets exhibit greater adverse selection, or when the high-cost market unravels. I characterize optimal PD and show how it is affected by changes in cost. In a calibration, optimal PD increases welfare by about $30/person-year. I extend the model to arbitrary signal structures, behavioral consumers, a monopolized industry, and multiproduct firms.