The Economics of Breakdowns, Checkups, and Cures.
A market in which the owner of a durable good, X, contracts with an expert for diagnostic and treatment services is studied. Good X may be in one of three states: health, disease, or failure. Only experts can determine whether X is healthy or diseased and perform treatment. The owner cannot tell whether recommended treatment is really needed. This creates an information-based demand for health insurance by risk-neutral consumers. Imperfections in the market for spot insurance may give rise to free diagnostic checks, strategic procrastination, and long-term health maintenance agreements. Copyright 1995 by University of Chicago Press.
Year of publication: |
1995
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Authors: | Taylor, Curtis R |
Published in: |
Journal of Political Economy. - University of Chicago Press. - Vol. 103.1995, 1, p. 53-74
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Publisher: |
University of Chicago Press |
Saved in:
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