Testing for asymmetric information in insurance markets: A test for ex ante moral hazard revisited
نویسندگان
چکیده
منابع مشابه
Equilibrium in competitive insurance markets with ex ante adverse selection and ex post moral hazard
Existence of pure strategy equilibria is studied in health insurance markets that exhibit both ex ante adverse selection of the Rothschild–Stiglitz–Wilson type, and ex post hidden information moral hazard. It is found that ex post moral hazard has two offsetting effects on the existence of equilibrium, and that in general it is difficult to say whether an equilibrium is more or less likely to e...
متن کاملTesting for Asymmetric Information in Automobile Insurance Market an Iranian Insurance Company
The presence of asymmetric information is an important source of efficiency loss for insurance companies and could reduce profitability. In this paper, we test the conditional independence of coverage choice and risk, where “conditional” means conditional on all variables observed by the insurer. We use two parametric methods: a pair of probits and a bivariate probit model. The data includes al...
متن کاملMeasuring Ex-Ante Welfare in Insurance Markets
Estimates of willingness to pay in adversely selected markets tend to understate the ex-ante (or utilitarian) willingness to pay for insurance. This paper derives an ’ex-ante’ willingness to pay curve that measures welfare from behind the veil of ignorance. I provide a strategy to estimate this curve using market choices and costs, combined with a measure of risk aversion. In examples motivated...
متن کاملTesting for Moral Hazard in Reinsurance Markets
TESTING FOR MORAL HAZARD IN REINSURANCE MARKETS Zhiqiang Yan ABSTRACT This paper tests for the existence of residual moral hazard in the three largest reinsurance markets in the United States for the period 1995-2000, and finds that (1) residual moral hazard does not exist in private passenger auto liability, product liability and overall reinsurance markets; (2) residual moral hazard might exi...
متن کاملThe other ex ante moral hazard in health.
It is well-known that pooled insurance coverage can induce people to make inefficiently low investments in self-protective activities. We identify another ex ante moral hazard that runs in the opposite direction. Lower levels of self-protection and the associated chronic conditions and behavioral patterns such as obesity, smoking, and malnutrition increase the incidence of many diseases and con...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: Economics Letters
سال: 2017
ISSN: 0165-1765
DOI: 10.1016/j.econlet.2016.10.044