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Commitment Problems Justify Subsidies For Medical Insurance


  • GLAZER, A.


Consumers who believe that government will provide them with some public medical care, even if they did not purchase medical insurance, may choose to purchase no such insurance. The amount of medical care consumed will then be less than the first-best optimum. Under specified conditions government can then increase the welfare of consumers by subsidizing insurance, or by providing public health care at a more generous level than the minimum it would otherwise give. The Geneva Papers on Risk and Insurance Theory (1992) 17, 137–145. doi:10.1007/BF00962710
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Suggested Citation

  • Glazer, A. & Niskanen, E., 1991. "Commitment Problems Justify Subsidies For Medical Insurance," Papers 90-91-11, California Irvine - School of Social Sciences.
  • Handle: RePEc:fth:calirv:90-91-11

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    References listed on IDEAS

    1. Sonstelie, Jon, 1982. "The Welfare Cost of Free Public Schools," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 794-808, August.
    2. Stiglitz, J. E., 1974. "The demand for education in public and private school systems," Journal of Public Economics, Elsevier, vol. 3(4), pages 349-385, November.
    3. Besley, Timothy & Coate, Stephen, 1991. "Public Provision of Private Goods and the Redistribution of Income," American Economic Review, American Economic Association, vol. 81(4), pages 979-984, September.
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    Cited by:

    1. Glazer, Amihai & Rothenberg, Lawrence S., 1999. "Increased capacity may exacerbate rationing problems: with applications to medical care," Journal of Health Economics, Elsevier, vol. 18(5), pages 669-678, October.

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    consumption ; medical care ; health insurance;


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