This paper characterizes the optimal information structure in competitive insurance markets with adverse selection. A regulator assigns ratings to individuals according to their risk characteristics, insurers offer fixed insurance contracts to each rating group, and the market clears as in...

In this paper, we present a simple model of information provision in competitive markets. We depart from previous literature in that we allow firms to choose both prices and information revelation policies. Under the assumption that the underlying state is binary, we show that in the unique...

This paper characterizes the optimal information structure in insurance markets in the presence of adverse selection. The optimal information structure minimizes ex-post risk subject to a participation constraint for insurees and a break-even constraint from insurers. In the unique optimal...