This paper describes how state-of-the-art methods of choice modeling can be used to analyze consumer choice behavior in "competitive" health insurance markets. I use the insurance choices of senior citizens in the U.S. as an example. I then consider the issue of whether consumers benefit when we...

Recent advances in "simulation based inference" have made it feasible to estimate discrete choice models with several alternatives and rich patterns of consumer taste heterogeneity. These new methods have important potential application in health economics. One important application is the...

This paper examines health insurance choice and its dynamics using panel data from Chile’s National Socio Economic Characterization Survey 1996-2001-2006. Evidence indicates that private insurance is losing customers to the public sector. Two different logistic models are used to explain the...

We analyze the optimal regulation of a MFI that has private information on the intrinsic quality of its loan portfolio (adverse selection) and where the MFI’s choice of effort to improve this quality cannot be observed by the regulator (moral hazard). In designing optimal contracts the...

The paper investigates the problem of possibility of investment allocation by economies according to adverse pattern, which can ultimately imply the rise of situation of market failure. We consider the transformation of “ideal” capital allocation into allocation of adverse-selection-type,...

Financial intermediation serves a valuable purpose, but it can also be structured using equity modes of financing. This can relieve the financee and increase diversity of entrepreneurial undertakings as in debt based commercial financing, there is little room for diversity with obligatory and...

We extend Akerlof ’s (1970) “Market for Lemons” by assuming that some buyers are overconfident. Buyers in our model receive a noisy signal about the quality of the good that is at display for sale. Overconfident buyers do not update according to Bayes’ rule but take the noisy signal at...

The work discusses a basic proposition in the theory of competition in markets with adverse selection (Bester, 1985). By working out the sequence of market transactions, we show that the effectiveness of collateral in avoiding equilibrium rationing depends on an assumption of uncontestability of...