Welfare‐Improving Asymmetric Information in Dynamic Insurance Markets
Bibliographic Data
| ID | 10172089 |
|---|---|
| Authors | Thomas de Garidel‐Thoron (University College London, corresponding author) |
| Year | 2005 |
| Volume | 113 |
| Issue | 1 |
| Pages | 121-150 |
| Publication date | 2005-02-01 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/426039 |
| OpenAlex | W1994154561 |
| Language | EN |
| Citations received | 1 |
| References cited | 18 |
This article presents a two‐period asymmetric learning model of insurance markets. When information about past accidents is not shared by insurers, asymmetries of information develop through time. Equilibrium contracts exist, are payoff unique, and display a realistic bonus‐malus pattern. Eliminating asymmetries through information sharing is welfare decreasing, in contrast with past contributions on insurance and adverse selection. When second‐period contract offers cannot be contingent on initial contract choice, a strict increase in welfare is obtained through menus of contracts, although initial contract choice is in itself worthless information
Actuarial science · Adverse selection · Business · Contrast (vision · Economics · Implicit contract theory · Information asymmetry · Insurance policy · Labour economics · Microeconomics · Stochastic game · Welfare · Computer Science · Financial Literacy, Pension, Retirement Analysis · Healthcare Policy and Management · Insurance and Financial Risk Management
| Citations per year | 0.07 |
|---|---|
| Citation span | 2012 - 2012 (1) |
| Highly cited | No |