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Competitive screening in insurance markets with endogenous wealth heterogeneity

Netzer, Nick; Scheuer, Florian - 2009 - Revised version

We examine equilibria in competitive insurance markets with adverse selection when wealth differences arise endogenously from unobservable savings or labor supply decisions. The endogeneity of wealth implies that high risk individuals may ceteris paribus exhibit the lower marginal willingness to...

Persistent link: https://www.econbiz.de/10003900923

Dynamic, incentive-compatible contracting for health services

Levaggi, Rosella; Moretto, Michele; Pertile, Paolo - 2023

This paper aims to characterise a dynamic, incentive-compatible contract for the provision of health services, allowing for both moral hazard and adverse selection. Patients' severity changes over time following a stochastic process and is private information of the provider. We characterise the...

Persistent link: https://www.econbiz.de/10014342117

Deductible or co-insurance: which is the better insurance contract under adverse selection?

Breuer, Michael (contributor) - 2004 - [Elektronische Ressource]

The standard solution to adverse selection is the separating equilibrium introduced by Rothschild and Stiglitz. Usually, the Rothschild-Stiglitz argument is developed in a model that allows for two states of the world only. In this paper adverse selection is dis-cussed for continuous loss...

Persistent link: https://www.econbiz.de/10001957148

Multiple losses, ex-ante moral hazard, and the non-optimality of the standard insurance contract

Breuer, Michael (contributor) - 2003 - [Elektronische Ressource]

Under certain conditions the optimal insurance policy will offer full coverage above a deductible, as Arrow and others have shown long time ago. Interestingly, the same design of insurance policies applies in case of a single loss and ex-ante moral hazard. However, many insurance policies...

Persistent link: https://www.econbiz.de/10001744785

A theory of firm decline

Clementi, Gian Luca; Cooley, Thomas F.; Di Giannatale, Sonia - 2010 - This version: July 20, 2009

We study the problem of an investor that buys an equity stake in an entrepreneurial venture, under the assumption that the former cannot monitor the latter’s operations. The dynamics implied by the optimal incentive scheme is rich and quite different from that induced by other models of...

Persistent link: https://www.econbiz.de/10008732070

Designing UISAs for developing countries

Cirelli, Fernando; Espino, Emilio; Sanchez, Juan M. - 2018

The benefits of implementing Unemployment Insurance Savings Accounts (UISAs) are studied in the presence of the multiple sources of information frictions often existing in developing countries. A benchmark incomplete markets economy is calibrated to Mexico in the early 2000s. The unconstrained...

Persistent link: https://www.econbiz.de/10011911462

Monopolistic screening under learning by doing

Gärtner, Dennis - 2007

whether learning effects increase or decrease the principal’s uncertainty about agents’ costs of production. Hence, what … drives the over- or underexploitation of learning effects is whether more efficient agents also learn faster (so costs … diverge through learning effects) or whether it is the less efficient agents who learn faster (so costs converge). Furthermore …

Persistent link: https://www.econbiz.de/10003892452

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

Lund, Diderik; Nilssen, Tore - 2003

We discuss the existence of a pooling equilibrium in a two-period model of an insurance market with asymmetric information. We solve the model numerically. We pay particular attention to the reasons for non-existence in cases where no pooling equilibrium exists. In addition to the phenom- enon...

Persistent link: https://www.econbiz.de/10012142264

Towards a theory of trade finance

Schmidt-Eisenlohr, Tim - 2010

Persistent link: https://www.econbiz.de/10008822095

Motivate and select : relational contracts with persistent types

Nikolowa, Radoslawa - 2014

We develop a model of relational contracts with moral hazard and asymmetric persistent information about an employee's type. We find that the form of the optimal contract depends on the job characteristics as well as the distribution of employees' talent. Bonus contracts are more likely to be...

Persistent link: https://www.econbiz.de/10010382180