haku: @indexterm smoking / yhteensä: 57
viite: 33 / 57
| Tekijä: | Bond, E. W. Crocker, K. J. |
| Otsikko: | Smoking, skydiving, and knitting: The endogenous categorization of risks in insurance markets with asymmetric information |
| Lehti: | Journal of Political Economy
1991 : FEB, VOL. 99:1, p. 177-200 |
| Asiasana: | INSURANCE RISK INFORMATION SMOKING EQUILIBRIUM ANALYSIS SOCIAL COSTS |
| Kieli: | eng |
| Tiivistelmä: | The efficiency and market equilibrium effects of endogenous categorization are analyzed, where insurance companies classify risks on the basis of insured person's voluntary consumption of products that are correlated with underlying loss propensities. It is shown that the use of such categorization may permit the attainment of first-best allocations as competitive Nash equilibria. The optimal insurance premium involves a trade-off between the use of categorization to correct moral hazard externalities generated by the consumption of the product and the use of differential consumption to sort heterogeneous consumers, thereby mitigating the social costs of adverse selection. |
SCIMA