Hidden insurance in a moral-hazard economy

• 成果类型: Article
• 署名作者: Bertola, Giuseppe; Koeniger, Winfried
• 署名单位: Universite Catholique de Lille; EDHEC Business School; Leibniz Association; Ifo Institut; University of St Gallen; IZA Institute Labor Economics
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12110
• 发表日期: 2015
• 页码: 777-790
• 关键词: 1st-order approach; optimal taxation

摘要

We analyze the general equilibrium of an economy in which a competitive industry produces nonexclusive insurance services. The equilibrium is inefficient because insurance contracts cannot control moral hazard, and welfare can be improved by policies that reduce insurance by increasing its price above marginal cost. We discuss how insurance production costs that exceed expected claim payments interact with moral hazard in determining the equilibrium's inefficiency, and show that these costs can make insurance premia so actuarially unfair as to validate the standard first-order conditions we exploit in our analysis.