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A Game Theoretic Foundation of Competitive Equilibria with Adverse Selection
Netzer, Nick; Scheuer, Florian - National Bureau of Economic Research (NBER) - 2012
We construct a fully specified extensive form game that captures competitive markets with adverse selection. In particular, it allows firms to offer any finite set of contracts, so that cross-subsidization is not ruled out. Moreover, firms can withdraw from the market after initial contract...
Persistent link: https://www.econbiz.de/10010885305
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Sources of Advantageous Selection: Evidence from the Medigap Insurance Market
Fang, Hanming; Silverman, Dan; Keane, Michael P. - National Bureau of Economic Research (NBER) - 2006
We provide strong evidence of advantageous selection in the Medigap insurance market, and analyze its sources. Using Medicare Current Beneficiary Survey (MCBS) data, we find that, conditional on controls for the price of Medigap, medical expenditures for senior citizens with Medigap coverage...
Persistent link: https://www.econbiz.de/10005085041
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Adverse Selection and Switching Costs in Health Insurance Markets: When Nudging Hurts
Handel, Benjamin R. - National Bureau of Economic Research (NBER) - 2011
impacts market outcomes and consumer welfare. Our identification strategy leverages a unique natural experiment that occurred … this analysis we develop and estimate a choice model that jointly quantifies switching costs, risk preferences, and ex ante … health risk. We use these estimates to study the welfare impact of an information provision policy that nudges consumers …
Persistent link: https://www.econbiz.de/10009323425
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Testing for Adverse Selection in Insurance Markets
Cohen, Alma; Siegelman, Peter - National Bureau of Economic Research (NBER) - 2009
This paper reviews and evaluates the empirical literature on adverse selection in insurance markets. We focus on empirical work that seeks to test the basic coverage-risk prediction of adverse selection theory--that is, that policyholders who purchase more insurance coverage tend to be riskier....
Persistent link: https://www.econbiz.de/10008634713
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Testing for Asymmetric Information Using 'Unused Observables' in Insurance Markets: Evidence from the U.K. Annuity Market
Poterba, James; Finkelstein, Amy - National Bureau of Economic Research (NBER) - 2006
This paper tests for asymmetric information in the U.K. annuity market of the 1990s by trying to identify 'unused observables,' attributes of individual insurance buyers that are correlated both with subsequent claims experience and with insurance demand but that insurance companies did not use...
Persistent link: https://www.econbiz.de/10005830029
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Adverse Selection in Insurance Markets: Policyholder Evidence from the U.K. Annuity Market
Poterba, James; Finkelstein, Amy - National Bureau of Economic Research (NBER) - 2000
This paper presents new evidence on the importance of adverse selection in insurance markets. We use a unique data set, consisting of all annuity policies sold by a large U.K. insurance company since the early 1980s, to analyze mortality differences across groups of individuals who purchased...
Persistent link: https://www.econbiz.de/10005830323
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Estimating Risk Preferences from Deductible Choice
Cohen, Alma; Einav, Liran - National Bureau of Economic Research (NBER) - 2005
preferences in our sample. To do so, we develop a structural econometric model, which accounts for adverse selection by allowing …
Persistent link: https://www.econbiz.de/10005011933
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Private Information and its Effect on Market Equilibrium: New Evidence from Long-Term Care Insurance
Finkelstein, Amy; McGarry, Kathleen - National Bureau of Economic Research (NBER) - 2003
This paper examines the standard test for asymmetric information in insurance markets: that its presence will result in a positive correlation between insurance coverage and risk occurrence. We show empirically that while there is no evidence of this positive correlation in the long-term care...
Persistent link: https://www.econbiz.de/10005088990
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Asymmetric Learning in Repeated Contracting: An Empirical Study
Cohen, Alma - National Bureau of Economic Research (NBER) - 2008
This paper studies a unique panel dataset of transactions with repeat customers of an insurer operating in a market in which insurers are not required by law or contract to share information about their customers' records. I use this dataset to test the asymmetric learning hypothesis that...
Persistent link: https://www.econbiz.de/10005575389
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Equilibria in Health Exchanges: Adverse Selection vs. Reclassification Risk
Whinston, Michael; Handel, Benjamin R.; Hendel, Igal - National Bureau of Economic Research (NBER) - 2013
Affordable Care Act (ACA). We use detailed health plan choice and utilization data to model individual-level projected health … risk and risk preferences. We combine the estimated joint distribution of risk and risk preferences with a model of … information in pricing. We investigate the welfare implications of these regulations with an emphasis on two potential sources of …
Persistent link: https://www.econbiz.de/10010796669