Cream Skimming, Dregs Skimming, and Pooling: On the Dynamics of Competitive Screening.

We discuss the existence of a pooling equilibrium in a two-period model <p> of an insurance market with asymmetric information. We solve the model <p> numerically. We pay particular attention to the reasons for non-existence <p> in cases where no pooling equilibrium exists. In addition to the phenom- <p> enon of cream skimming emphasized in earlier literature, we here point <p> to the the importance of the opposite: dregs skimming, whereby high-risk <p> consumers are proÞtably detracted from the candidate pooling contract.