Insurance Market Games: Scale Effects and Public Policy
We propose a game-theoretic model to study various effects of scale in an insurance market. After reviewing a simple static model, we present a one-period game in which both the buyers and sellers of insurance make strategic bids, and show that, under reasonably broad conditions, market equilibrium exists. For a special case, we then consider how both the price and quantity of insurance, as well as other quantities of interest to public policy decision makers, are affected by the number of insurance firms, the number of customers, and the total amount of capital provided by investors.
|Date of creation:||Aug 1994|
|Publication status:||Published in Zeitschrift fur Nationalokonomie (Journal of Economics) (1998), 67(2): 109-134|
|Contact details of provider:|| Postal: Yale University, Box 208281, New Haven, CT 06520-8281 USA|
Phone: (203) 432-3702
Fax: (203) 432-6167
Web page: http://cowles.yale.edu/
More information through EDIRC
|Order Information:|| Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA|
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.:
- Borch, Karl, 1962. "Application of Game Theory to Some Problems in Automobile Insurance," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 2(02), pages 208-221, September.
- Schlesinger, Harris, 1984. "Two-person insurance negotiation," Insurance: Mathematics and Economics, Elsevier, vol. 3(3), pages 147-149, July.
- J. David Cummins & Jack VanDerhei, 1979. "A Note on the Relative Efficiency of Property-Liability Insurance Distribution Systems," Bell Journal of Economics, The RAND Corporation, vol. 10(2), pages 709-719, Autumn.
- Baton, Bernard & Lemaire, Jean, 1981. "The Core of a Reinsurance Market," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 12(01), pages 57-71, June.
- Sherrill Shaffer, 1989. "Pooling intensifies joint failure risk," Working Papers 89-1, Federal Reserve Bank of Philadelphia.
- Kunreuther, Howard & Pauly, Mark, 1985. "Market equilibrium with private knowledge : An insurance example," Journal of Public Economics, Elsevier, vol. 26(3), pages 269-288, April.
- Paul L. Joskow, 1973. "Cartels, Competition and Regulation in the Property-Liability Insurance Industry," Bell Journal of Economics, The RAND Corporation, vol. 4(2), pages 375-427, Autumn.
- Baton, Bernard & Lemaire, Jean, 1981. "The Bargaining Set of a Reinsurance Market," ASTIN Bulletin: The Journal of the International Actuarial Association, Cambridge University Press, vol. 12(02), pages 101-114, December.
When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:1076. 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: (Matthew C. Regan)
If references are entirely missing, you can add them using this form.