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Managed Claims: Zur Notwendigkeit einer vertikalen Integration von Versicherungs- und Reparaturleistungen

  • Nell, Martin
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    The paper deals with the so called external moral hazard. This problem occurs, when-ever insurance companies bear the repair costs of the insured in the case of a damage. The insurance coverage results in a decrease of the price elasticity of demand and therefore in higher prices for repair services and goods, since markets for repair goods are usually imperfect and prices are thus above marginal costs. Empirical evidence is given that the price increase for repair services and goods due to external moral hazard is quite substantial. It is argued in this paper that the only way to tackle external moral hazard efficiently is a vertical integration of insurance on the one hand and the supply of repair goods and services on the other hand: Insurance companies have either to provide repair goods and services by themselves or make cooperation agreements with providers.

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    Paper provided by University of Hamburg, Institute for Risk and Insurance in its series Working Papers on Risk and Insurance with number 2.

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    Date of creation: 2001
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    Handle: RePEc:zbw:hzvwps:2
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    1. Wilson, Charles, 1977. "A model of insurance markets with incomplete information," Journal of Economic Theory, Elsevier, vol. 16(2), pages 167-207, December.
    2. Frech, H E, III & Ginsburg, Paul B, 1975. "Imposed Health Insurance in Monopolistic Markets: A Theoretical Analysis," Economic Inquiry, Western Economic Association International, vol. 13(1), pages 55-70, March.
    3. Rothschild, Michael & Stiglitz, Joseph E, 1976. "Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information," The Quarterly Journal of Economics, MIT Press, vol. 90(4), pages 630-49, November.
    4. Martin Gaynor & Deborah Haas-Wilson & William B. Vogt, 1998. "Are Invisible Hands Good Hands? Moral Hazard, Competition, and the Second Best in Health Care Markets," NBER Working Papers 6865, National Bureau of Economic Research, Inc.
    5. Pauly, Mark V, 1974. "Overinsurance and Public Provision of Insurance: The Roles of Moral Hazard and Adverse Selection," The Quarterly Journal of Economics, MIT Press, vol. 88(1), pages 44-62, February.
    6. Sherry Glied, 1999. "Managed Care," NBER Working Papers 7205, National Bureau of Economic Research, Inc.
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