How complex are the contracts offered by health plans?

When health plans compete under adverse selection, the competitive equilibrium set of contracts is unique. However, the allocation of these contracts among health plans is undetermined. We show that three health plans suffice to sustain an equilibrium where each health plan offers a single contract and attracts a single type of agent (full specialization). We also show that this equilibrium can be ruled out by introducing any horizontal differentiation, and that if in equilibrium each health plan attracts all types of agents, at least one of the health plans must do so through a menu of contracts.

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Year of publication:	2010
Authors:	Olivella, Pau ; Vera-Hernandez, Marcos
Published in:	SERIEs - Journal of the Spanish Economic Association. - Heidelberg : Springer, ISSN 1869-4195. - Vol. 1.2010, 3, p. 305-323
Publisher:	Heidelberg : Springer
Subject:	Private Krankenversicherung \| Adverse Selektion \| Asymmetrische Information \| Versicherungsökonomik \| health plans competition \| adverse selection \| differentiation

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Type of publication:	Article
Type of publication (narrower categories):	Article
Language:	English
Other identifiers:	10.1007/s13209-010-0026-3 [DOI] 671655353 [GVK] hdl:10419/77752 [Handle]
Classification:	D82 - Asymmetric and Private Information ; I11 - Analysis of Health Care Markets ; L13 - Oligopoly and Other Imperfect Markets
Source:	EconStor

Persistent link: https://www.econbiz.de/10010317093