This paper applies an extended Lorenz dominance welfare principle to make and compare estimates of the overall progressivity of taxes and transfers for Australia, Canada, Sweden, and the U.S.

This paper considers whether lack of information regarding risk exposures can lead to a demand for negligence liability insurance. We find that, under the uniform negligence rule, any demand for liability insurance must come from informed individuals. The group whose privately optimal level of...

We analyze the effect of ambiguous loss probabilities on competitive insurance markets with asymmetric information. We characterize equilibria under actuarially fair pricing with preferences that are second-order ambiguity averse (have smooth indifference curves). We also show existence of...

We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...

We develop a model of price competition between insurers where insurers maximize expected profit subject to a solvency constraint. Insurers base prices in part on expected losses, the estimates of which are updated in a Bayesian fashion. We assume that insurers are overconfident—they...

On-demand insurance is an innovative business model from the InsurTech space, which provides coverage for episodic risks. It makes use of a simple fact in a practical way: People differ in their frequency of exposure as well as the probability of loss. The extra dimension of heterogeneity can be...

This paper shows that using a one-parameter functional form for the Lorenz curve is equivalent to ranking income distributions based on their Gini indices. Irrespective of the underlying data, the fitted Lorenz curves can never intersect. Circu mstances in which one-parameter Lorenz curves can...