calibrated model of employer-sponsored health insurance, we show that the risk adjustment commonly used by employers to offset …

Should choice be offered in social insurance programs? The paper presents a conceptual framework that identifies the …

This paper examines the existence and nature of competitive equilibrium with moral hazard. The more insurance an … individual has, the less care will he take. Consequently, insurance firms attempt to restrict their clients' aggregate insurance … purchases. If individuals' aggregate insurance purchases are observable, each firm will ration the amount of insurance its …

We study the Rothschild-Stiglitz model of competitive insurance markets with endogenous information disclosure by both … supplemental (undisclosed and nonexclusive) contract that brings the high risk individual to full insurance (at his own odds). We …

A large empirical literature found that the correlation between insurance purchase and ex post realization of risk is … insurance a la Akerlof (1970), Pauly (1974) and Rothschild and Stiglitz (1976) where consumers have one … in a negative correlation in equilibrium between insurance coverage and ex post realization of risk. We show that if the …

Home equity insurance policies, policies insuring homeowners against declines in the price of their homes, would bear … some resemblance both to ordinary insurance and to financial hedging vehicles. A menu of choices for the design of such … insurance company in effect serves as a retailer to homeowners of short positions in real estate futures markets or of put …

Revealed-preference measures of willingness to pay (WTP) capture the value of insurance only against the risk that … remains when choosing insurance. This paper provides a method to translate observed market WTP and cost curves into an ex …-ante value of insurance that can analyze the impact of insurance market policies on ex-ante expected utility. The key additional …

Standard theories of insurance, dating from Rothschild and Stiglitz (1976), stress the role of adverse selection in … explaining the decision to purchase insurance. In these models, higher risk people buy full or near-full insurance, while lower … insurance markets, in many others, it is the lower risk individuals who have more insurance coverage. If the standard model is …