INCENTIVE EFFICIENT PRICE SYSTEMS IN LARGE INSURANCE ECONOMIES WITH ADVERSE SELECTION

• 成果类型: Article
• 署名作者: Citanna, Alessandro; Siconolfi, Paolo
• 署名单位: Yeshiva University; Columbia University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12184
• 发表日期: 2016
• 页码: 1027-1056
• 关键词: competitive equilibria; general-equilibrium; pareto optima; rat race; MARKETS; INFORMATION

摘要

We decentralize incentive efficient allocations in large adverse selection economies by introducing a competitive market for mechanisms, that is, for menus of contracts. Facing a budget constraint, informed individuals purchase (lottery) tickets to enter mechanisms, whereas firms sell tickets and supply slots at mechanisms at given prices. Beyond optimization, market clearing, and rational expectations, an equilibrium requires that firms cannot favorably change, or cut, prices. An equilibrium exists and is incentive efficient. An equilibrium can be computed as the solution to a programming problem that selects the incentive efficient outcome preferred by the highest type within an appropriately defined set. For two-types economies, this is the only equilibrium outcome.