Insurance Contract Valuation, Experience Rating, and Asymmetric Information
نویسندگان
چکیده
The study follows previous work on the role of experience rating in resolving information asymmetry problems in insurance contracting. Results of the study provide additional evidence that contracts which are experience-rated are less susceptible to pricing inefficiency due to moral hazard and adverse selection than are contracts which are not experience-rated. This study extends previous work by showing that experience-rated contracts are most effective among lower risk insureds.
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