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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

Equilibrium in Competitive Insurance Markets with Moral Hazard

Arnott, Richard J.; Stiglitz, Joseph E. - 2021

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...

Persistent link: https://www.econbiz.de/10013232017

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

Optimality and Equilibrium in a Competitive Insurance Market Under Adverse Selection and Moral Hazard

Stiglitz, Joseph E. - 2013

This paper analyzes optimal and equilibrium insurance contracts under adverse selection and moral hazard, comparing them with those under a single informational asymmetry. The complex interactions of self-selection and moral hazard constraints have important consequences. We develop an analytic...

Persistent link: https://www.econbiz.de/10013077944

Estimating Risk Preferences from Deductible Choice

Cohen, Alma; Einav, Liran - 2021

We use a large data set of deductible choices in auto insurance contracts to estimate the distribution of risk … the deductible choice. We find that individuals in our sample have on average an estimated absolute risk aversion which is …

Persistent link: https://www.econbiz.de/10013231443

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

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

Home Equity Insurance

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

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

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