EVIDENCE ON ADVERSE SELECTION - EQUILIBRIUM SIGNALING AND CROSS-SUBSIDIZATION IN THE INSURANCE MARKET

• 成果类型: Article
• 署名作者: PUELZ, R; SNOW, A
• 署名单位: University System of Georgia; University of Georgia
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/261930
• 发表日期: 1994
• 页码: 236-257
• 关键词: imperfect information; product differentiation; asymmetric information; implicit markets; hedonic prices; moral hazard; COMPETITION; DISCRIMINATION; EFFICIENCY; demand

摘要

The configuration of equilibrium in the market for automobile collision insurance is examined empirically by representing the premium-deductible menu and the demand function as a standard hedonic system. Using contractual data from a representative insurer, we estimate a reduced-form hedonic premium equation and the inverse of the marginal bid equation for insurance coverage. The data reveal an equilibrium with adverse selection and market signaling but lead us to reject the hypothesis that high risks receive contracts subsidized by low risks.