Competition between insurers with superior information
AbstractWe analyze markets where insurers are better informed about risk than consumers. We show that even competitive markets may result in insufficient information revelation and inefficient insurance coverage. This explains why certain risky consumers remain uninsured and why certain market segments are persistently profitable. We also show robustness to competition in menus or mechanisms. Our analysis of the âcontrary of adverse selectionâ (competition between principals with common value and exclusivity) is suitable for other markets (lawyers, doctors, mechanics, etc.).
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 49 (2005)
Issue (Month): 2 (February)
Contact details of provider:
Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Villeneuve, Bertrand, 2005. "Competition between insurers with superior information," Economics Papers from University Paris Dauphine 123456789/5356, Paris Dauphine University.
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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