Essays on insurance markets
This dissertation consists of three chapters on adverse-selection type insurance markets. Chapter 1 develops a model for analyzing non-exclusive insurance markets. It establishes that the "screening" considerations of models following Rothschild and Stiglitz (1976)-long applied for analysis of exclusive-contract insurance markets-also apply when contracting is non-exclusive and contracts are linearly priced. It characterizes the contracts offered in efficient markets and shows that screening and non-exclusivity together impose significant restrictions on the structure of insurance policies. In a two risk-type market for retirement annuities, market efficiency requires that either all annuities purchased will provide declining real income streams or else all will provide rising income streams. Chapters 2 and 3 examine the consequences of regulations which restrict the use of characteristic-based pricing in exclusive contracting insurance markets. Chapter 2 argues that restrictions on pricing on the basis of observable characteristics such as gender, race, or the outcomes of genetic tests are undesirable, since the distributional goals of these restrictions can be accomplished more efficiently by employing social insurance.
Year of publication: |
2006
|
---|---|
Authors: | Rothschild, Casey |
Other Persons: | Muhamet Yildiz. (contributor) |
Institutions: | Massachusetts Institute of Technology. Dept. of Economics. (contributor) |
Publisher: |
Massachusetts Institute of Technology |
Saved in:
freely available
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