This paper analyzes the interaction of direct and indirect risk selection in health insurance markets. It is shown that direct risk selection - using measures unrelated to the benefit package like selective advertising or 'losing' applications of high risk individuals - nevertheless has an...

This paper analyzes optimal risk adjustment for direct risk selection (DRS). Integrating insurers activities for risk selection into a discrete choice model of individuals' health insurance choice shows that DRS has the structure of a contest. For the contest success function used in most of the...

This paper analyzes the distortions of health insurers' benefit packages due to adverse selection when there is imperfect competition. Within a discrete choice setting with two risk types, the following main results are derived: For intermediate levels of competition, the benefit packages of...

This paper is concerned with learning decision makers' preferences using data on observed choices from a finite set of risky alternatives. We propose a discrete choice model with unobserved heterogeneity in consideration sets and in standard risk aversion. We obtain sufficient conditions for the...

This paper is concerned with learning decision makers' (DMs) preferences using data on observed choices from a fi nite set of risky alternatives with monetary outcomes. We propose a discrete choice model with unobserved heterogeneity in consideration sets (the collection of alternatives...