Asymmetric information in the form of moral hazard and adverse selection can result in sizable program costs for government‐provided crop insurance plans. We present a methodology and illustrative simulations to show how these two types of information problems interact in a way to create...

The main motivation for this paper is the recognition of the fact that asymmetric information is the form of moral hazard and adverse selection results in sizeable efficiency losses. These costs are passed back to producers in the form of excessively high premium rates and also passed back to...

We develop a theoretical model of input use by agricultural producers who purchase crop insurance, and thus may engage in moral hazard. Through simulations, our findings show a combination of partial insurance coverage and partial monitoring of inputs may reduce substantially the problems...

In this paper we develop a theoretical model of input supply by agricultural producers who purchase crop insurance and so who may engage in moral hazard. We show, through simulations, that a combination of partial insurance coverage combined with a mnimum standard for input use may reduce...