The value of information regarding risk class for a monopoly insurer and its customers is examined in both symmetric and asymmetric information environments. A monopolist always prefers contracting with uninformed customers as this maximizes the rent extracted under symmetric information while...

When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across various tasks is often identified with a trade-off between the responsiveness (sensitivity, precision, signal-noise ratio) of the performance measure and its similarity (congruity,...

When health plans compete under adverse selection, the competitive equilibrium set of contracts is unique. However, the allocation of these contracts among health plans is undetermined. We show that three health plans suffice to sustain an equilibrium where each health plan offers a single...

Der Markt für Riester-Produkte ist intransparent. In diesem Artikel wird gezeigt, warum die Informationsasymmetrien zu Lasten der Verbraucher nicht durch den Markt aufgelöst werden können, sondern nur durch staatliche Vorgaben. Eine empirische Erhebung verdeutlicht, dass auch die...

We study a model of adverse selection, hard and soft information, and mentalizing ability-the human capacity to represent others' intentions, knowledge, and beliefs. By allowing for a continuous range of different information types, as well as for different means of acquiring information, we...

We study the consequences of imposing a minimum coverage in an insurance market where enrollment is mandatory and agents have private information on their true risk type. If the regulation is not too stringent, the equilibrium is separating in which a single insurer monopolizes the high risks...

In a relatively recent paper, Gehrig and Stenbacka (Eur Econ Rev 51, 77–99, 2007) show that information sharing increases banks’ profits to the detriment of creditworthy entrepreneurs in a model of a banking duopoly with switching costs and poaching. They restrict their analysis to the case...

We examine a situation where efforts on different tasks positively affect production but are not separately verifiable and where the manager (principal) and the worker (agent) have different ideas about how production should be carried out: agents prefer a less efficient way of production. We...