Insurance in a Market for Credence Goods
We study the impact of insurance on the amount of fraud in a physician-patient relationship. In a market for credence goods, where prices are regulated by an authority, physicians act as experts. Due to their informational advantage, physicians have an incentive to cheat by inducing inappropriate treatment levels. It is shown that a higher coinsurance rate may lead to either less fraud in the market and a lower probability of patients searching for second opinions or more fraud and more searches. We also show that a higher coinsurance rate corresponds with a higher level of physicians specialising.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: Poschingerstrasse 5, 81679 Munich|
Phone: +49 (89) 9224-0
Fax: +49 (89) 985369
Web page: http://www.cesifo.de
More information through EDIRC
References listed on IDEAS
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.:
- Marie-Cécile Fagart & Pierre Picard, 1998.
"Optimal Insurance Under Random Auditing,"
98-47, Centre de Recherche en Economie et Statistique.
- Fagart, M.-C. & Picard, P., 1998. "Optimal Insurance Under Random Auditing," Papers 9808, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
- M-C. Fagart & P. Picard, 1998. "Optimal insurance under random auditing," THEMA Working Papers 98-08, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Keith J. Crocker & John Morgan, 1998. "Is Honesty the Best Policy? Curtailing Insurance Fraud through Optimal Incentive Contracts," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 355-375, April.
- Dilip Mookherjee & Ivan Png, 1989. "Optimal Auditing, Insurance, and Redistribution," The Quarterly Journal of Economics, Oxford University Press, vol. 104(2), pages 399-415.
- Lacker, Jeffrey M & Weinberg, John A, 1989.
"Optimal Contracts under Costly State Falsification,"
Journal of Political Economy,
University of Chicago Press, vol. 97(6), pages 1345-63, December.
- Lacker, J.M., 1989. "Optimal Contracts Under Costly State Falsification," Purdue University Economics Working Papers 956, Purdue University, Department of Economics.
- Emons, Winand, 1997.
"Credence Goods Monopolists,"
Berkeley Olin Program in Law & Economics, Working Paper Series
qt9c5508x4, Berkeley Olin Program in Law & Economics.
- Townsend, Robert M., 1979.
"Optimal contracts and competitive markets with costly state verification,"
Journal of Economic Theory,
Elsevier, vol. 21(2), pages 265-293, October.
- Robert M. Townsend, 1979. "Optimal contracts and competitive markets with costly state verification," Staff Report 45, Federal Reserve Bank of Minneapolis.
- Asher Wolinsky, 1993.
"Competition in a Market for Informed Experts' Services,"
RAND Journal of Economics,
The RAND Corporation, vol. 24(3), pages 380-398, Autumn.
- Asher Wolinsky, 1991. "Competition in a Market for Informed Experts' Services," Discussion Papers 959, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_677. 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: (Julio Saavedra)
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.