Advantageous selection in insurance markets

• 成果类型: Article
• 署名作者: de Meza, D; Webb, DC
• 署名单位: University of London; London School Economics & Political Science; University of Exeter
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.2307/2696408
• 发表日期: 2001
• 页码: 249-262
• 关键词: unrealistic optimism; adverse selection; moral hazard; equilibrium; INFORMATION; RISK

摘要

This article reverses the standard conclusion that asymmetric information plus competition results in insufficient insurance provision. Risk-tolerant individuals take few precautions and are disinclined to insure, but they are drawn into a pooling equilibrium by the low premiums created by the presence of safer more risk-averse types. Taxing insurance drives out the reckless clients, allowing a strict Pareto gain. This result depends on administrative costs in processing claims and issuing policies, as does the novel finding of a pure-strategy, partial-pooling, subgame-perfect Nash equilibrium in the insurance market.