This paper revisits the problem of adverse selection in the insurance market of Rothschild and Stiglitz. We extend the game-theoretic structure in Hellwig to a mechanism in which the Miyazaki-Wilson-Spence allocation is the unique perfect-Bayesian equilibrium. As is well-known, this allocation...

We consider a model of competitive insurance markets under asymmetric information with ambiguity-averse agents who maximize their maxmin expected utility. The interaction between asymmetric information and ambiguity aversion gives rise to some interesting results. First, for some parameter...

We consider a model of competitive insurance markets involving both asymmetric information and ambiguity about the accident probability. We show that there can exist a full-insurance pooling equilibrium. We also present an example where an increase in ambiguity leads to a strict Pareto...

We consider a model of competitive insurance markets under asymmetric information with ambiguity-averse agents who maximize their maxmin expected utility. The interaction between asymmetric information and ambiguity aversion gives rise to some interesting results. First, for some parameter...