boone, jan; Bijlsma, M.; Zwart, G. - Tilburg University, Center for Economic Research - 2011
We study optimal risk adjustment in imperfectly competitive health insurance markets when high-risk consumers are less … differences are fully compensated. To achieve first best, risk adjustment should overcompensate for serving high-risk agents to … trade off between efficiency and consumer welfare. Reducing the difference in risk adjustment subsidies to high and low …