Insurance in a Market for Credence Goods
AbstractWe study the impact of variations in the degree of insurance on the amount of fraud in a physician-patient relationship. In a market for credence goods, where prices are regulated by an authority, physicians act as experts. Due to their informational advantage, physicians have an incentive to cheat by pretending to perform inappropriately high treatment levels leading to overcharging patients. Our approach aims on the impact on changes in each, patients' and physicians' incentive structure when the proportional degree of coinsurance varies. It is shown that a higher coinsurance rate may lead to either less fraud in the market and a lower probability of patients searching for second opinions or more fraud and more searches. Copyright The Journal of Risk and Insurance.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by The American Risk and Insurance Association in its journal The Journal of Risk and Insurance.
Volume (Year): 72 (2005)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.wiley.com/bw/journal.asp?ref=0022-4367&site=1
More information through EDIRC
Other versions of this item:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marie-CÃ©cile Fagart & Pierre Picard, 1999.
"Optimal Insurance Under Random Auditing,"
The Geneva Risk and Insurance Review,
Palgrave Macmillan, vol. 24(1), pages 29-54, June.
- M-C. Fagart & P. Picard, 1998. "Optimal insurance under random auditing," THEMA Working Papers 98-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Marie-Cécile Fagart & Pierre Picard, 1998. "Optimal Insurance Under Random Auditing," Working Papers 98-47, Centre de Recherche en Economie et Statistique.
- Fagart, M.-C. & Picard, P., 1998. "Optimal Insurance Under Random Auditing," Papers 9808, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- Emons, Winand, 2001.
"Credence goods monopolists,"
International Journal of Industrial Organization,
Elsevier, vol. 19(3-4), pages 375-389, March.
- Winand Emons, 1995. "Credence Goods Monopolists," Diskussionsschriften dp9501, Universitaet Bern, Departement Volkswirtschaft.
- Emons, Winand, 1997. "Credence Goods Monopolists," Berkeley Olin Program in Law & Economics, Working Paper Series qt9c5508x4, Berkeley Olin Program in Law & Economics.
- Mookherjee, Dilip & Png, Ivan, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 399-415, May.
- Lacker, J.M., 1989.
"Optimal Contracts Under Costly State Falsification,"
Purdue University Economics Working Papers
956, Purdue University, Department of Economics.
- Lacker, Jeffrey M & Weinberg, John A, 1989. "Optimal Contracts under Costly State Falsification," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1345-63, December.
- Robert Townsend, 1979.
"Optimal contracts and competitive markets with costly state verification,"
45, Federal Reserve Bank of Minneapolis.
- Townsend, Robert M., 1979. "Optimal contracts and competitive markets with costly state verification," Journal of Economic Theory, Elsevier, vol. 21(2), pages 265-293, October.
- Keith J. Crocker & John Morgan, 1998. "Is Honesty the Best Policy? Curtailing Insurance Fraud through Optimal Incentive Contracts," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 355-375, April.
- Uwe Dulleck & Rudolf Kerschbamer, 2005.
"Experts vs. discounters: consumer free riding and experts withholding advice in markets for credence goods,"
Economics working papers
2005-09, Department of Economics, Johannes Kepler University Linz, Austria.
- Dulleck, Uwe & Kerschbamer, Rudolf, 2009. "Experts vs. discounters: Consumer free-riding and experts withholding advice in markets for credence goods," International Journal of Industrial Organization, Elsevier, vol. 27(1), pages 15-23, January.
- Uwe Dulleck & Rudolf Kerschbamer, 2007. "Experts vs. Discounters: Consumer Free Riding and Experts Withholding Advice in Markets for Credence Goods," Working Papers 2007-21, Faculty of Economics and Statistics, University of Innsbruck.
- Emons, Winand, 2010.
"Incentive Compatible Reimbursement Schemes for Physicians,"
CEPR Discussion Papers
7659, C.E.P.R. Discussion Papers.
- Winand Emons, 2010. "Incentive Compatible Reimbursement Schemes for Physicians," Diskussionsschriften dp1001, Universitaet Bern, Departement Volkswirtschaft.
- repec:cgr:cgsser:03-07 is not listed on IDEAS
- Alexander Rasch & Christian Waibel, 2013. "What drives fraud in a credence goods market? Evidence from a field study," CER-ETH Economics working paper series 13/179, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Bonroy, Olivier & Lemarié, Stéphane & Tropéano, Jean-Philippe, 2013.
"Credence goods, experts and risk aversion,"
Elsevier, vol. 120(3), pages 464-467.
- Hyndman, Kyle & Ozerturk, Saltuk, 2011.
"Consumer information in a market for expert services,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 80(3), pages 628-640.
- Kyle Hyndman & Saltuk Ozerturk, 2008. "Consumer Information in a Market for Expert Services," Departmental Working Papers 0801, Southern Methodist University, Department of Economics.
- Dominik Erharter, 2012. "Credence goods markets, distributional preferences and the role of institutions," Working Papers 2012-11, Faculty of Economics and Statistics, University of Innsbruck.
- Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2013.
"Second-Degree Moral Hazard in a Real-World Credence Goods Market,"
Economics Working Papers
ECO2013/08, European University Institute.
- Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2013. "Second-Degree Moral Hazard in a Real-World Credence Goods Market," CESifo Working Paper Series 4458, CESifo Group Munich.
- Balafoutas, Loukas & Kerschbamer, Rudolf & Sutter, Matthias, 2013. "Second-Degree Moral Hazard in a Real-World Credence Goods Market," IZA Discussion Papers 7714, Institute for the Study of Labor (IZA).
- Loukas Balafoutas & Rudolf Kerschbamer & Matthias Sutter, 2013. "Second-Degree Moral Hazard in a Real-World Credence Goods Market," Working Papers 2013-26, Faculty of Economics and Statistics, University of Innsbruck.
- Nell, Martin & Schiller, Jörg, 2002. "Erklärungsansätze für vertragswidriges Verhalten von Versicherungsnehmern aus Sicht der ökonomischen Theorie," Working Papers on Risk and Insurance 7, University of Hamburg, Institute for Risk and Insurance.
- repec:cgr:cgsser:02-08 is not listed on IDEAS
- Georges Dionne, 2012. "The Empirical Measure of Information Problems with Emphasis on Insurance Fraud and Dynamic Data," Cahiers de recherche 1233, CIRPEE.
- Dulleck, Uwe & Kerschbamer, Rudolf, 2005. "Experts vs Discounters: Competition and Market Unravelling When Consumers Do Not Know What they Need," CEPR Discussion Papers 5242, C.E.P.R. Discussion Papers.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.