Insurance contracts with imprecise probabilities and adverse selection
This article deals with optimal insurance contracts in the framework of imprecise probabilities and adverse selection. Agents differ not only in the objective risk they face but also in the perception of risk. In monopoly, a range of configurations that VNM preferences preclude appears: a pooling contract may be optimal, incomplete coverage may be offered to high risks, low risks may be better covered.
|Date of creation:||2004|
|Date of revision:|
|Publication status:||Published in Economic theory, 2004, Vol. 23, no. 4. pp. 777-794.Length: 17 pages|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
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- Bertrand Villeneuve, 2000.
"The Consequences for a Monopolistic Insurance Firm of Evaluating Risk Better than Customers: The Adverse Selection Hypothesis Reversed,"
The Geneva Risk and Insurance Review,
Palgrave Macmillan, vol. 25(1), pages 65-79, June.
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- Schmeidler, David, 1989.
"Subjective Probability and Expected Utility without Additivity,"
Econometric Society, vol. 57(3), pages 571-87, May.
- David Schmeidler, 1989. "Subjective Probability and Expected Utility without Additivity," Levine's Working Paper Archive 7662, David K. Levine.
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- Michael Landsberger & Isaac Meilijson, 1999. "A general model of insurance under adverse selection," Economic Theory, Springer, vol. 14(2), pages 331-352.
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