Competitive Cross-Subsidization∗

A Game Theoretic Foundation of Competitive Equilibria with Adverse Selection∗

We construct a fully specified extensive form game that captures competitive markets with adverse selection. In particular, it allows firms to offer any finite set of contracts, so that cross-subsidization is not ruled out. Moreover, firms can withdraw from the market after initial contract offers have been observed. We show that a subgame perfect equilibrium always exists and that, in fact, wh...

The Economics of Consumer Directed Health Care

This paper presents a model of consumer directed health care, high deductible insurance plans. Insurance companies in a competitive market offer such plans; higher deductibles result in lower premiums. Such changes affect consumers’ decisions on preventive care. I show that preventive care may or may not increase when consumers face more risk and lower premium. Furthermore, I look at selection ...

A functional model for monitoring equity and effectiveness in purchasing health insurance premiums for the poor: evidence from Cambodia and the Lao PDR.

OBJECTIVES To assess the impact on equity and effectiveness of introducing targeted subsidies for the poor into existing voluntary health insurance schemes in Low Income Countries with special reference to cross-subsidisation. METHODS A functional model was constructed using routine collected financial data to analyse changes in financial flows and resulting shifts in cross-subsidization betw...

Cross-subsidization in hospital care: some lessons from the law and economics of regulation.

Subsidies in oligopoly markets: a welfare comparison between symmetric and asymmetric costs

Oligopolistic industries generally produce less than is socially desirable. As a result, the use of production subsidies is often suggested as a means of raising production toward the efficient level in imperfectly competitive markets. In cases where firms are equally efficient in producing the good, the common prescription is a policy of uniform subsidization, as suggested by Besley (1989).(1)...