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Monitoring and privacy in automobile insurance markets with moral hazard
Filipova, Lilia (contributor) - 2007
may choose the precision of monitoring. Also privacy costs incurred thereby are taken into account. Two alternative … data. With any contract scheme some monitoring will be optimal unless the privacy costs increase too fast in relation to … the precision of the monitoring signal. In the benchmark situation (without privacy costs) relying completely on both …
Persistent link: https://www.econbiz.de/10003547443
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Monitoring and privacy in automobile insurance markets with moral hazard
Filipova, Lilia - 2007
may choose the precision of monitoring. Also privacy costs incurred thereby are taken into account. Two alternative … data. With any contract scheme some monitoring will be optimal unless the privacy costs increase too fast in relation to … the precision of the monitoring signal. In the benchmark situation (without privacy costs) relying completely on both …
Persistent link: https://www.econbiz.de/10010266128
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Nitpicky insurers and the law of contracts
Bourgeon, Jean-Marc; Picard, Pierre M. - 2017
The standard economic analysis of the insured-insurer relationship under moral hazard postulates a simplistic setup that hardly explains the many features of an insurance contract. We extend this setup to include the situation that the insured was facing at the time of the accident and the...
Persistent link: https://www.econbiz.de/10011723471
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Better safe than sorry? : ex ante and ex post moral hazard in dynamic insurance data
Abbring, Jaap H.; Chiappori, Pierre-André; Zavadil, Tibor - 2008
This paper empirically analyzes moral hazard in car insurance using a dynamic theory of an insuree's dynamic risk (ex … ante moral hazard) and claim (ex post moral hazard) choices and Dutch longitudinal micro data. We use the theory to …
Persistent link: https://www.econbiz.de/10011376656
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Exaggerating to Break-Even : Reference-Dependent Moral Hazard in Automobile Insurance Claims
Gao, Feng; Lien, Jaimie W.; Zheng, Jie - 2021
The effects of asymmetric information are often difficult to detect empirically, such as in insurance settings. We show that allowing for reference-dependent preferences can assist with this empirical challenge. Using detailed auto insurance claims data, we show that policyholders exhibit...
Persistent link: https://www.econbiz.de/10013245259
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A Model of the Imf as a Coinsurance Arrangement
Chami, Ralph - 2014
The paper shows that an IMF-like coinsurance arrangement among countries can play a useful role in the global financial system. The operation of the coinsurance arrangement is examined under different loan contracts. It shows that, if the IMF?s objective is to safeguard its resources and be...
Persistent link: https://www.econbiz.de/10013068880
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A Model of the Imf as a Coinsurance Arrangement
Chami, Ralph - 2014
The paper shows that an IMF-like coinsurance arrangement among countries can play a useful role in the global financial system. The operation of the coinsurance arrangement is examined under different loan contracts. It shows that, if the IMF's objective is to safeguard its resources and be...
Persistent link: https://www.econbiz.de/10013068971
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Risk-Sharing or Risk-Taking? Counterparty Risk, Incentives and Margins
Biais, Bruno - 2012
We analyze optimal hedging contracts and show that although hedging aims at sharing risk, it can lead to more risk-taking. News implying that a hedge is likely to be loss-making undermines the risk-prevention incentives of the protection seller. This incentive problem limits the capacity to...
Persistent link: https://www.econbiz.de/10013113017
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Adverse Selection in Insurance Markets : On-Demand Contracts As a Screening Device
Braun, Alexander - 2020
We show that on-demand insurance contracts, an innovative form of coverage recently introduced through the InsurTech sector, can serve as a screening device. To this end, we develop a new adverse selection model consistent with Wilson (1977), Miyazaki (1977) and Spence (1978). Consumers have...
Persistent link: https://www.econbiz.de/10012822927
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Risk-Sharing or Risk-Taking? Counterparty Risk, Incentives and Margins
Biais, Bruno - 2020
Derivatives activity, motivated by risk-sharing, can breed risk-taking. Bad news about the risk of the asset underlying the derivative increases the expected liability of a protection seller and undermines her risk-prevention incentives. This limits risk-sharing, and may create endogenous...
Persistent link: https://www.econbiz.de/10012857581