Models of insurance with adverse selection predict that only the best risks — those least likely to suffer a loss — are uninsured, a prediction at odds with coverage denials for pre-existing conditions. They also typically assume that insurance pro- vision is costless: the only cost is...

We analyze the problem of a seller who has multiple units of a good and faces a set of buyers with unit demands, private information, and identity-dependent externalities. We derive the seller's optimal mechanism and characterize its main properties. As an application of the model, we consider...