Pricing Institutions and the Welfare Cost of Adverse Selection

• 成果类型: Article
• 署名作者: Weyl, E. Glen; Veiga, Andre
• 署名单位: Yale University; University of Oxford; University of Oxford
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20150295
• 发表日期: 2017
• 页码: 139-148
• 关键词: private information; Insurance market; uncertainty; COMPETITION; care

摘要

To mitigate adverse selection in insurance markets, individuals are often mandated to buy at least a baseline plan, but may choose to opt into a premium plan. In some markets, such as US health exchanges, each plan is responsible for the full expenses of those who buy it ( total pricing). In other markets, such as the privately supplied Medigap top-ups to traditional government-provided Medicare, premium providers are only responsible for the incremental expenses they top up ( incremental pricing). For parameter values calibrated to health exchanges, the shift from total to incremental pricing reduces the welfare loss from adverse selection by an order of magnitude.