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Structural Estimation with a Randomized Trial of a Principal Agent Model of Medical Insurance with Moral Hazard


  • Vera-Hernandez, Marcos

    (University College London)


Despite the importance of principal-agent models in the development of modern economic theory, there are few estimations of these models. We contribute to fill this gap in a field where moral hazard has traditionally been considered important: the utilization of health care services. This paper presents a model where the individual decides to have treatment or not when she suffers an illness spell. The decision is taken on the basis of comparing benefits and out-of-pocket monetary costs of treatment. In the paper, we recover the estimates of the corresponding principal agent model and obtain an approximation to the optimal contract.

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  • Vera-Hernandez, Marcos, 2002. "Structural Estimation with a Randomized Trial of a Principal Agent Model of Medical Insurance with Moral Hazard," Royal Economic Society Annual Conference 2002 177, Royal Economic Society.
  • Handle: RePEc:ecj:ac2002:177

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