کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5075690 | 1477179 | 2015 | 8 صفحه PDF | دانلود رایگان |
- We design an insurance contract with a low compensation period and subsidies.
- The low compensation period can help distinguish the risk types of individuals.
- Our contract weakly dominates the traditional partial insurance contract.
- When it comes to the separating equilibrium, the low-risk policyholders can obtain higher utility from our contract.
Adverse selection has a significant influence on trading efficiency in insurance markets. Inspired by the quality identification function of the probation period in the secondhand car market, an insurance contract with a low compensation period is designed. It is proved that the contract can distinguish the risk types of the policyholders to achieve a separating equilibrium. And it can make a strict Pareto improvement to the traditional partial insurance contract under certain conditions. Finally, an example is given to demonstrate the conclusions.
Journal: Information Economics and Policy - Volume 31, June 2015, Pages 67-74