Switching costs in competitive health insurance markets
AbstractIn this paper we investigate the possible presence of switching costs when consumers are offered the opportunity to change their basic health insurance provider. We focus on the specific case of Switzerland which implemented a pure form of competition in basic health insurance markets. We identify several barriers to switching, namely choice overload, status quo bias, the possession of supplementary contracts for enrollees in bad health, firm’s pricing strategies based on providing low price supplementary products, poor regulation of reserves and the limitations of the previous risk-equalization mechanism which left room for risk selection practices.
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Bibliographic InfoPaper provided by ESSEC Research Center, ESSEC Business School in its series ESSEC Working Papers with number WP1305.
Length: 15 pages
Date of creation: Feb 2013
Date of revision:
Brand loyalty; Choice overload; Competition among health insurers; Status quo bias; Supplementary health insurance; Switching costs; The Swiss case;
Other versions of this item:
- Karine Lamiraud, 2013. "Switching costs in competitive health insurance markets," Post-Print hal-00808420, HAL.
- D41 - Microeconomics - - Market Structure and Pricing - - - Perfect Competition
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-COM-2013-04-13 (Industrial Competition)
- NEP-HEA-2013-04-13 (Health Economics)
- NEP-IAS-2013-04-13 (Insurance Economics)
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.:
- Brigitte Dormont & Pierre-Yves Geoffard & Karine Lamiraud, 2009.
"The influence of supplementary health insurance on switching behaviour: evidence from Swiss data,"
John Wiley & Sons, Ltd., vol. 18(11), pages 1339-1356.
- Dormont, Brigitte & Geoffard, Pierre-Yves & Lamiraud, Karine, 2009. "The influence of supplementary health insurance on switching behaviour : evidence from Swiss data," Economics Papers from University Paris Dauphine 123456789/1623, Paris Dauphine University.
- Joseph Farrell & Paul Klemperer, 2006.
"Co-ordination and Lock-in: Competition with Switching Costs and Network Effects,"
2006-W07, Economics Group, Nuffield College, University of Oxford.
- Farrell, Joseph & Klemperer, Paul, 2007. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Handbook of Industrial Organization, Elsevier.
- Paul Klemperer & Joseph Farrell, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Economics Series Working Papers 2006-W07, University of Oxford, Department of Economics.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," Competition Policy Center, Working Paper Series qt9n26k7v1, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
- Farrell, Joseph & Klemperer, Paul, 2006. "Coordination and Lock-In: Competition with Switching Costs and Network Effects," CEPR Discussion Papers 5798, C.E.P.R. Discussion Papers.
- Frank, Richard G. & Lamiraud, Karine, 2009.
"Choice, price competition and complexity in markets for health insurance,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 71(2), pages 550-562, August.
- Richard Frank & Karine Lamiraud, 2008. "Choice, Price Competition and Complexity in Markets for Health Insurance," NBER Working Papers 13817, National Bureau of Economic Research, Inc.
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