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. The analysis of this body of work, we argue, indicates that …

This paper analyzes optimal and equilibrium insurance contracts under adverse selection and moral hazard, comparing …-risk type gets more stringent (i.e. when low risk individuals shirk with lower levels of insurance). We also show that a pooling … accident probability) or when the provision of insurance is non-exclusive (i.e. individuals can purchase insurance from more …

Insurance markets often feature consumer sorting along both an extensive margin (whether to buy) and an intensive …

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

Policymakers subsidizing health insurance often face uncertainty about future market prices. We study the implications … of one policy response: linking subsidies to prices, to target a given post-subsidy premium. We show that these price … Massachusetts insurance exchange data, we find that price-linking increases prices 1-6%, and much more in less competitive markets …

It is by now well-known that, in the presence of moral hazard or adverse selection, randomization of insurance premia …; and v) considers why randomization appears to occur less often in practice than the theory suggests it should …

This paper investigates the existence and nature of equilibrium in a competitive insurance market under adverse … contrast, the Akerlof price equilibrium described a situation where the insurance firm has no information about sales to a … particular individual. We show that with more plausible information assumptions - no insurance firm has full information but at …

The steady state general equilibrium and welfare consequences of health insurance reform are evaluated in a calibrated … their future health status, medical expenditures, labor productivity, access to employer provided group health insurance … insurance contracts available in equilibrium, creates a potential role for health insurance reform. In particular, we consider a …

insurance under adverse selection to show that such "initial conditions" can indeed matter. When firms are price-takers, the …