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Shiller, Robert J. - 2010

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 policies is presented here, and conceptual issues are...

Persistent link: https://www.econbiz.de/10012763566

Dynamic Inefficiencies in Insurance Markets : Evidence from Long-Term Care Insurance

Finkelstein, Amy; Sufi, Amir; McGarry, Kathleen M. - 2021

We examine whether unregulated, private insurance markets efficiently provide insurance against reclassification risk (the risk of becoming a bad risk and facing higher premiums). To do so, we examine the ex-post risk type of individuals who drop their long-term care insurance contracts relative...

Persistent link: https://www.econbiz.de/10013244772

The Moral Hazard of Insuring the Insurers

Hall, Brian J.; Bohn, James G. - 2021

State guaranty funds are quasi-governmental agencies that provide insurance to policyholders against the risk of insurance company failure. But insurance provided by guaranty funds, like all insurance, creates moral hazard problems, especially for companies that are insolvent or near-insolvent....

Persistent link: https://www.econbiz.de/10013245311

A Note on Taxation as Social Insurance for Uncertain Labor Income

Kaplow, Louis - 2014

Various authors, notably Eaton and Rosen (1980a) and Varian (1980), have proposed that income taxation may be justified to some extent on the ground that it serves as social insurance against uncertainties in labor income. They assume that private insurance is unavailable. primarily because of...

Persistent link: https://www.econbiz.de/10013069377

Government Relief for Risk Associated with Government Action

Kaplow, Louis - 2010

A significant source of risk arises from uncertainty concerning future government policy. Government action - - tax reform, deregulation, judicial decisions, budgetary shifts - - produces gains and losses for those who invested under preexisting rules. The effects of government relief - -...

Persistent link: https://www.econbiz.de/10012760199

Capital Accumulation and Uncertain Lifetimes with Adverse Selection

Abel, Andrew B. - 2010

This paper examines the implications of adverse selection in the private annuity market for the pricing of private annuities and the consequent effects on constrption and bequest behavior. With privately known heterogeneous mortality probabilities, adverse selection causes the rate of return on...

Persistent link: https://www.econbiz.de/10012763046

An Empirical Examination of Information Barriers to Trade in Insurance

Cawley, John - 2010

This paper tests restrictions implied by the canonical theory of insurance under asymmetric information using ideal … life insurance. We report several findings which are hard to reconcile with the canonical theory. First, we find a striking …-linear pricing than predicted by theory: the theory predicts that prices rise with quantity, but we find that they fall. Third, we …

Persistent link: https://www.econbiz.de/10012763899

Multidimensional Private Information, Market Structure and Insurance Markets

Fang, Hanming - 2016

A large empirical literature found that the correlation between insurance purchase and ex post realization of risk is often statistically insignificant or negative. This is inconsistent with the predictions from the classic models of insurance a la Akerlof (1970), Pauly (1974) and Rothschild and...

Persistent link: https://www.econbiz.de/10012980144

Imperfect Competition in Selection Markets

Mahoney, Neale - 2016

Standard policies to correct market power and selection can be misguided when these two forces co-exist. Using a calibrated model of employer-sponsored health insurance, we show that the risk adjustment commonly used by employers to offset adverse selection often reduces the amount of...

Persistent link: https://www.econbiz.de/10013006017

Social Insurance, Information Revelation, and Lack of Commitment

Golosov, Mikhail - 2014

We study the optimal provision of insurance against unobservable idiosyncratic shocks in a setting in which a benevolent government cannot commit. A continuum of agents and the government play an infinitely repeated game. Actions of the government are constrained only by the threat of reverting...

Persistent link: https://www.econbiz.de/10013044626

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