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Asymmetric information in insurance: general testable implications
Abstract
Several recent articles on empirical contract theory and insurance have tested for a positive correlation between coverage and ex post risk, as predicted by standard models of pure adverse selection or pure moral hazard. We show here that the positive correlationproperty can be extended to general setups: competitive insurance markets and cases where risk aversion is public. We test our results on a French dataset. Our tests confirm that the estimated correlation is positive; they also suggest the presence of market power.
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Citations
Cites
The Market for "Lemons": Quality Uncertainty and the Market Mechanism
Akerlof, G. A. (1970) · The Quarterly Journal of Economics · doi:10.2307/1879431 · Cited by 23,016
Credit Rationing in Markets with Imperfect Information
Stiglitz, J. E., & Weiss, A. (1981) · Columbia University · doi:10.7916/d8v12ft1 · Cited by 12,769
Cited by
Estimating Risk Preferences from Deductible Choice
Cohen, A., & Einav, L. (2007) · American Economic Review · doi:10.1257/aer.97.3.745 · Cited by 708
Why is the market for long-term care insurance so small?
Brown, J. R., & Finkelstein, A. (2007) · Journal of Public Economics · doi:10.1016/j.jpubeco.2007.02.010 · Cited by 373
Selection in Insurance Markets: Theory and Empirics in Pictures
Einav, L., & Finkelstein, A. (2011) · Journal of Economic Perspectives · doi:10.1257/jep.25.1.115 · Cited by 353
Quantifying search and switching costs in the US auto insurance industry
Honka, E. (2014) · The RAND Journal of Economics · doi:10.1111/1756-2171.12073 · Cited by 325
Does affirmative action lead to mismatch? A new test and evidence
Arcidiacono, P., Aucejo, E. M., Fang, H., & Spenner, K. I. (2011) · Quantitative Economics · doi:10.3982/qe83 · Cited by 80
Metadata
- Authors
- Chiappori, P.-A., Jullien, B., Salanié, B., & Salanié, F.
- Venue
- The RAND Journal of Economics
- Publisher
- Wiley
- Published
- 2006-12
- Volume
- 37
- Issue
- 4
- Pages
- 783-798
- ISSN
- 0741-6261 (ISSN-L)
- 1756-2171
- OpenAlex
- W2113722078
- Cited by
- 312
- References
- 2
- FWCI
- 50.97
- Type
- journal article
- Language
- en
- Open access
- closed
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- Chiappori, P.-A., Jullien, B., Salanié, B., & Salanié, F. (2006). Asymmetric information in insurance: general testable implications. The RAND Journal of Economics. https://doi.org/10.1111/j.1756-2171.2006.tb00057.x
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Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
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