Dealing with Moral Hazard and Adverse Selection Simultaneously

Georges Dionne () and Pierre Lasserre

Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: Although Insurers Face Adverse Selection and Moral Hazard When They Set Insurance Contracts, These Two Types of Asymmetrical Information Have Been Given Separate Treatments Sofar in the Economic Literature. This Paper Is a First Attempt to Integrate Both Problems Into a Single Model. We Show How It Is Possible to Use Time in Order to Achieve a First-Best Allocation of Risks When Both Problems Are Present Simultaneously.

Keywords: Social Values; Adverse Selection; Insurance; Risk (search for similar items in EconPapers)
Pages: 21P. pages
Date: 1985
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:8559

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