When prices hardly matter: Incomplete insurance contracts and markets for repair goods
AbstractThis paper looks at markets characterized by the fact that the demand side is insured. In these markets a consumer purchases a good to compensate consequences of unfavorable events, such as an accident or an illness. Insurance policies in most lines of insurance base indemnity on the insured’s actual expenses, i.e., the insured would be partially or completely reimbursed when purchasing certain goods. In this setting we discuss the interaction between insurance and repair markets by focusing, on the one hand, upon the development of prices and the market structure in markets with insured customers, and, on the other hand, the resulting backlash on optimal insurance contracting.
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Bibliographic InfoPaper provided by EconWPA in its series Risk and Insurance with number 0501002.
Length: 29 pages
Date of creation: 14 Jan 2005
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Incomplete Contracts; Insurance; Repair Markets;
Other versions of this item:
- Nell, Martin & Richter, Andreas & Schiller, Jörg, 2009. "When prices hardly matter: Incomplete insurance contracts and markets for repair goods," European Economic Review, Elsevier, vol. 53(3), pages 343-354, April.
- Nell, Martin & Richter, Andreas & Schiller, Jörg, 2006. "When prices hardly matter: Incomplete insurance contracts and markets for repair goods," Discussion Papers in Business Administration 1187, University of Munich, Munich School of Management.
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
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