Genetic Tests and Inter-Temporal Screening in Competitive Insurance Markets
AbstractWe consider successive generations of non-altruistic individuals carrying either a good or bad gene. Daughters are more likely to inherit their mother's gene. Competitive insurers can perform a genetic test revealing an agent's gene. They can condition their quotes on the agent's or on her ancestors' genetic status. In equilibrium, generation one is bribed to take the test with an unconditional premium. The insurer uses this information to profitably screen a finite number of generations of their offspring. The offspring of good-gene carriers subsidize the tested generation.
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Bibliographic InfoArticle provided by De Gruyter in its journal The B.E. Journal of Economic Analysis & Policy.
Volume (Year): 9 (2009)
Issue (Month): 1 (July)
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Web page: http://www.degruyter.com
Other versions of this item:
- Winand Emons, 2006. "Genetic Tests and Intertemporal Screening in Competitive Insurance Markets," Diskussionsschriften dp0605, Universitaet Bern, Departement Volkswirtschaft.
- Emons, Winand, 2007. "Genetic Tests and Intertemporal Screening in Competitive Insurance Markets," CEPR Discussion Papers 6047, C.E.P.R. Discussion Papers.
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
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.:
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CESifo Working Paper Series
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The Geneva Papers on Risk and Insurance,
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