In a standard financial market model with asymmetric information with a finite number N of risk-averse informed traders, competitive rational expectations equilibria provide a good approximation to strategic equilibria as long as N is not too small: equilibrium prices in each situation converge...

Telemonitoring devices can be used to screen consumers' characteristics and mitigate information asymmetries that lead to adverse selection in insurance markets. However, some consumers value their privacy and dislike sharing private information with insurers. In the second-best efficient...

Should insurance prices vary with age? I consider competitive markets for lemons where a signal (eg, age) partitions consumers (eg, young and old). I study the continuum of policies between full community rating (CR, equal prices) and zero CR (no restriction on prices). CR increases welfare if...

his study develops a rational expectations equilibrium model of IPO underpricing within which the distribution of underpricing is explicitly modeled, as opposed to assumed. Contrary to assumptions of prior studies, IPO quality is not inferred from IPO underpricing, is explicitly defined, and is...

This paper extends the theoretical literature on underwriting cycles by assuming insurers have heterogeneous exposure to a catastrophe. Distinct from the existing literature on insurance cycles, we model optimal contracting by competitive insurers. Since losses take time to pay out, and insurers...