This paper characterizes the optimal insurance contract in an environment where an informed agent can misrepresent the state of the world to a principal who cannot credibly commit to an auditing strategy. Because the principal cannot commit, the optimal strategy of the agent is not to tell the truth all the time. Assuming that there are T > 1 possible losses, and that the agent cannot fake an accident (he is constrained only to misreport the size of the loss when a loss occurs), the optimal contract is such that higher losses are over-compensated while lower losses are on average under-compensated. The amount by which higher losses are over-compensated decreases as the loss increases. The optimal contract may then be represented as a simple combination of a deductible, a lump-sum payment and a coinsurance provision.
Ce document de travail caractérise le contrat optimal dans une économie où un agent informé de l'état de la nature doit rapporter cet état à un principal qui ne peut se commettre de manière crédible dans une stratégie de vérification de l'annonce de l'agent. Puisque le principal ne peut se commettre, il devient optimal pour l'agent de mentir avec une certaine probabilité. En supposant qu'il existe T>1 pertes possibles en cas d'accident, que l'agent ne peut feindre un accident (il est restreint à rapporter la perte en cas d'accident,0501s la présence d'un accident est une information de nature commune), le contrat optimal est tel que les hautes pertes sont sur-indemnisées alors que les faibles pertes sont sous-indemnisées en moyenne. Le niveau de sur-indemnisation des hautes pertes diminue toutefois avec la perte elle-même. Le contrat optimal peut ainsi être représenté comme une simple combinaison d'une franchise, d'un paiement forfaitaire et de co-paiements.
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Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information G2 - Financial Economics - - Financial Institutions and Services C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
References listed on IDEAS 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.:
Khalil, Fahad & Parigi, Bruno M, 1998.
"Loan Size as a Commitment Device,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 135-50, February.
Cited by: (explanations, 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.)
Bénédicte Coestier & Nathalie Fombaron, 2003.
"L'audit en assurance,"
THEMA Working Papers
2003-41, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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