Azevedo and Gottlieb [2017] (AG) define a notion of equilibrium that always exists in the Rothschild and Stiglitz [1976] (RS) model of competitive insurance markets, provided costs are bounded. However, equilibrium predictions are sensitive to assumptions made about the upper bound of cost:...

Abstract We develop a tractable model of competitive insurance markets with a continuum of types and exogenous restrictions on the set of allowed contracts. Our model nests, as special cases, the market for lemons of Akerlof (1970) and the unrestricted contracts setting of Rothschild and...

Platforms like telecommunication networks sell participation into groups, with group quality being determined by group composition. A monopolist may price-discriminate by offering several mutually exclusive groups of different qualities and prices, but such behavior seems absent from platform...

We study incumbency advantage in markets with positive consumption externalities. Users of an incumbent platform receive stochastic opportunities to migrate to an entrant. They can accept a migration opportunity or wait for a future opportunity. In some circumstances, users have incentives to...

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...