LEARNING AND EVIDENCE IN INSURANCE MARKETS

• 成果类型: Article
• 署名作者: Pram, Kym
• 署名单位: Nevada System of Higher Education (NSHE); University of Nevada Reno
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12646
• 发表日期: 2023
• 页码: 1685-1714
• 关键词: term-care insurance; adverse selection; genetic information; categorical discrimination; endogenous information; CONTRACTS; monopoly

摘要

I analyze a model of monopoly insurance contracting where the consumer has access to endogenous, costly evidence of his risk type. I characterize when the consumer is worse off if the insurer is allowed to condition contracts on evidence and when the ability to contract on evidence leads to a Pareto improvement. I compare the results to an analogous setting with perfect competition: Under perfect competition, when evidence acquisition costs are low, the ability to contract on evidence is always Pareto improving. For intermediate costs, I uncover a new source of unraveling.