When prices hardly matter: Incomplete insurance contracts and markets for repair goods
AbstractThis paper locks at markets charaterized 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 purchased certain goods. In this setting we discuss the interaction between insurance and repair markets by focusing, on the one hand, upon on 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 University of Hamburg, Institute for Risk and Insurance in its series Working Papers on Risk and Insurance with number 14.
Date of creation: 2005
Date of revision:
insurance; incomplete contracts; repair markets;
Find related papers by JEL classification:
- 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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