Government discretionary transfers and overinsurance
Excess distortions in government transfer policies might result from the government lack of ability to commit not to help unlucky agents. Incentive considerations that are crucial in standard insurance in the presence of moral hazard play, no role in this case. A benevolent government that sets transfers after agents have chosen their effort faces a pure risk-sharing problem and provides full insurance, inducing too little effort. The lack of commitment ability might also cause indeterminacy: the economy might end in any of several equilibria, without the government being able to push it to a particular one.
Volume (Year): 26 (1999)
Issue (Month): 1 Year 1999 (June)
|Contact details of provider:|| Web page: http://www.econ.uchile.cl/|
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:udc:esteco:v:26:y:1999:i:1:p:27-44. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Verónica Kunze)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.