Dynamic Contracts and Learning by Doing This paper studies the design of optimal contracts in dynamic environments where agents learn by doing. We derive a condition under which contracts are fully incentive compatible. A closed-form solution is obtained when agents have CARA utility. It shows that human capital accumulation strengthens the power of incentives and allows the principal to provid...

Indemnifying smallholder farmers against crop loss is thought to be infeasible due to information problems. Consequently there is interest in developing alternative, partial, insurance products. Examples include rainfall insurance and the limited liability inherent in credit contracts. I argue that while these products may reduce information asymmetry, ambiguity averse farmers struggle to asses...

The aim of this paper is to introduce an insurance model allowing reinsurance and dividend payment. Our model deals with several homogeneous contracts and takes into account the legislation regarding the provisions to be justified by the insurance companies. This translates into some restriction on the (maximal) number of contracts the company is allowed to cover. We deal with a controlled jump...

This paper analyzes the application of quantile hedging on equity-linked life insurance contracts in the presence of transaction costs. Following the time-based replication strategy, we present the explicit expressions for the present values of expected hedging errors and transaction costs. The results are derived by using the adjusted hedging volatility σ̄ proposed by Leland. Furthermore, the e...

We use data from the life insurance industry to study the properties of long term contracts in a world where buyers cannot commit to a contract. We develop a theoretical model that captures the main features of this industry, in particular, how contracts are designed to deal with reclassification risk. The data is especially suited for a test of the theory since it includes information on the e...

In insurance economies with a continuum of agents and adverse selection, it is shown that incentive-constrained Pareto efficient allocations correspond to regulated competitive (or compensated competitive) equilibria in markets with non-linear pricing for options to buy insurance contracts. These options make the incentive constraints self-enforcing. Efficiency is achieved through a “universal ...

PURPOSE To collect baseline data and describe how medical schools handle faculty affairs and faculty development responsibilities. METHOD In January 2000, the authors surveyed faculty affairs designees at 125 U.S. medical schools, using a questionnaire developed in consultation with a group of faculty affairs professionals. RESULTS The responding 76 medical schools (61%) support over four t...

Experience rating is largely absent from medical malpractice insurance contracts. This article presents evidence that physician risk differences persist, and it develops an empirical model for experience rating with a semi-parametric estimator. Estimating the model using claims history data from Florida, the authors obtain improved prediction of individual claims over several years and provide ...

OBJECTIVE To evaluate selected Children's Health Insurance Program Reauthorization Act claims-based quality measures using claims data alone, electronic health record (EHR) data alone, and both data sources combined. METHODS Our population included pediatric patients from 46 clinics in the OCHIN network of community health centers, who were continuously enrolled in Oregon's public health insu...