This paper applies direct tests for adverse selection and moral hazard in the market for child care. A unique data set containing quality measures of various characteristics of child care provided by 746 rooms in 400 centers, as well as the evaluation of the same attributes by 3,490 affiliated...

This paper uses an asymmetric information framework to understand the causes of the recent financial crisis in Korea. It shows that the Korean data is consistent with this explanation of the crisis. It then draws on this analysis to discuss several lessons that can help guide Korean policymakers...

This article describes the anatomy of health insurance. It begins by considering the optimal design of health insurance policies. Such policies must make tradeoffs appropriately between risk sharing on the one hand and agency problems such as moral hazard (the incentive of people to seek more...

The paper considers conceptual issues underlying empirical work on markets. It has three parts. The first reviews the analysis of demand and equilibrium in retail markets and then considers recent advances in the analysis of markets which require different assumptions; markets where adverse...

I aim to shed light on why emergency room (ER) utilization increased following the Oregon Health Insurance Experiment but decreased following a Massachusetts policy. To do so, I unite the literatures on insurance and treatment effects. Under an MTE model that assumes no more than the LATE...

Although international programs for carbon offsets play an important role in current and prospective climate-change policy, they continue to be very controversial. Asymmetric information creates several incentive problems, include adverse selection and moral hazard, in offset markets. The...

Finally, we analyze a risk-diversification model, where bond holdings hedge real exchange rate risks, while equities hedge non-financial income fluctuations. An equity home bias emerges as a calibratable equilibrium outcome

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 obesity rate in the United States has risen significantly in the past few decades. While a number of economic causes for the rise in obesity have been explored, little attention has been on the role of health insurance per se. This paper examines obesity in the context of a model where...

During the last two decades, the treatment of infertility has improved dramatically. These treatments, however, are expensive and rarely covered by insurance, leading many states to adopt regulations mandating that health insurers cover them. In this paper, we explore the effects of benefit...