Efficient risk-sharing under adverse selection and subjective risk perception
AbstractThe present paper thoroughly explores second-best efficient allocations in an adverse selection insurance economy. We start from a natural extension of the classical model, assumer less than perfect risk perceptions. We propose first and second welfare theorems, by means of which we describe efficiency-enhancing policies. Notions of weak and strong adverse selection are promising for interpreting real world insurance arrangements.
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Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 2002-19.
Date of creation: 2002
Date of revision:
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- Mouhamadou Fall, 2012. "Fiabilité des tests génétiques et architecture des contrats d'équilibre," Working Papers halshs-00751861, HAL.
- Georges Dionne & Nathalie Fombaron & Neil Doherty, 2012. "Adverse Selection in Insurance Contracting," Cahiers de recherche 1231, CIRPEE.
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