IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

Endogenous Information and Privacy in Automobile Insurance Markets

This paper examines the implications of insurers’ offering a voluntary monitoring technology to insureds in automobile insurance markets with adverse selection and without commitment. Under the consideration of the inherent costs related to the loss of privacy, the paper analyzes the incentives of insureds to reveal information, whereby they can decide how much or what quality of information to reveal. It is also allowed for the possibility that high risk individuals might mimic low risk individuals. The resulting market equilibrium is characterized and it is shown, that it will never be optimal for insureds to reject the monitoring technology and that under certain conditions, which are specified in the paper, it will be optimal for them to reveal complete information. Concerning the welfare effects both low risk and high risk individuals will always be better off. Unless it is optimal for individuals to reveal complete information, an all-or-nothing nature of the monitoring technology will not be efficient.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Universitaet Augsburg, Institute for Economics in its series Discussion Paper Series with number 284.

in new window

Length: pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:aug:augsbe:0284
Contact details of provider: Postal: Universitaetsstrasse 16, D-86159 Augsburg, Germany
Phone: +49 821 598 4060
Fax: +49 821 598 4217
Web page:

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is featured on the following reading lists or Wikipedia pages:

  1. Studies on the automobile industry

When requesting a correction, please mention this item's handle: RePEc:aug:augsbe:0284. 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: (Dr. Albrecht Bossert)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.