Multiple Contracting in Insurance Markets

Thomas Mariotti
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Thomas Mariotti: Toulouse School of Economics

No 820, 2016 Meeting Papers from Society for Economic Dynamics

Abstract: We study a model of insurance markets in which multiple contracting endogenously emerges in equilibrium. Different layers of coverage are fairly priced according to the types of consumers who purchase them, giving rise to cross-subsidies between types, but not between contracts. Riskier consumers demand greater total coverage at an increasing unit price, but the contracts offered by firms exhibit quantity discounts. We emphasize the need to regulate the supply side of insurance markets, while consumers can be left free to choose their coverage level.

Date: 2016
New Economics Papers: this item is included in nep-cta, nep-ias and nep-mic
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:820

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