Individuals often respond with strong emotions to being penalised. Such responses suggest that informal penalties are important and play a role in creating deterrence. In this paper informal penalties are analysed in the context of medical errors. The introduction of informal penalties, if...

A central theme in the international debate on genetic testing concerns the extent to which insurance companies should be allowed to use genetic information in their design of insurance contracts. This issue is analysed within a model with the following important feature: A person's well-being...

This paper considers a model with a sponsor and several bureaus to analyse the role of sharing rules. Various incentives for budget overspending are identified; among them the overspending of budgets due to soft budget constraints. Four different sharing rules are also considered that differ with...

We study a health-insurance market where individuals are offered coverage against both medical expenditures and losses in income. Individuals vary in their level of innate ability. If there is private information about the probability of illness and an individual’s innate ability is...

This work evaluates policy recommendations on medical error reporting systems presented in, To err is human, a report published by the Institute of Medicine. Here mandatory reporting should be applied for adverse events, while voluntary reporting is recommended for near misses. This analysis...

This work examines the role of penalties as providers of incentives to prevent medical errors and ensure that such incidents, once they occur, become common knowledge. It is shown that a scheme with two penalties (accountability and non-report) is able to induce the first-best solution. However,...

I etterkant av Stortingets vedtak om å bevilge 1 milliard kroner til behandling av pasienter i utlandet (Pasientbroen), inviterte Rikstrygdeverkets prosjektorganisasjon ”Kjøp av Helsetjenester i Utlandet” flere forsknings- og utredningsinstitusjoner til å komme med innspill til...

In this paper, we view health insurance as a combined hedge against the two consequences of falling ill: treatment expenditures and loss in income. We discuss how an individual’s ability when healthy affects her decision on whether to buy health insurance with treatment to full recovery if ill...

A good health is important for having a good life. This is supported by surveys on happiness. However, at least after a certain age, the health state deteriorates naturally over time due to ageing. Nevertheless, research reports show that old people in average are satisfied with their health...

This paper analyses optimal contracts in a principal-agent model where the agent is intrinsically motivated at the outset and there is an endogenous relationship between the structure of incentive payments and intrinsic motivation (crowding effects). The analysis shows that crowding effects have...