Health Insurance and Consumer Welfare : The Case of Monopolistic Drug Markets

Individual moral hazard engendered by health insurance and monopolistic production are both typical phenomena of drug markets. We develop a simple model containing these two elements and show that private agents tend to overinsure themselves against health respectively drug expenses if drugs can be produced at low marginal costs. If marginal costs are negligible, health insurance should be abandoned at all.

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Year of publication:	1999
Authors:	Anlauf, Markus ; Wigger, Berthold U.
Institutions:	Institut für Volkswirtschaftslehre und Statistik, Abteilung für Volkswirtschaftslehre

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Series:	Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 565
Classification:	I11 - Analysis of Health Care Markets ; D42 - Monopoly ; H51 - Government Expenditures and Health
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010558549