Cost-sharing is regarded as an important tool to reduce moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to decrease utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations -...

Cost-sharing is regarded as an important tool to combat moral hazard in health insurance. Contrary to standard prediction, however, such requirements are found to reduce utilization both of efficient and of inefficient care. I employ a simple model that incorporates two possible explanations -...