This paper aims to characterise a dynamic, incentive-compatible contract for the provision of health services, allowing … private information of the provider. We characterise the optimal dynamic contract and show that it is made up of two …, which is affected by both patient and hospital characteristics. To illustrate the characteristics of the dynamic contract …

hazard. The paper concentrates on the conditions under which the standard insurance contract holds under moral hazard and … rarely ever optimal to combine two losses in one insurance contract prescribing only a single deductible for both losses if …Under certain conditions the optimal insurance policy will offer full coverage above a deductible, as Arrow and others …

-long contract to which only the insurer can commit, implement identical consumption, effort and welfare outcomes. Unlike contracts …. Numerically, we show that Markov-perfect contracts provide sizable insurance, especially at low asset levels, and are able to … explain a significant part of wealth inequality beyond what can be explained by self-insurance. The welfare gains from …