The privacy problem for internalizing behavioral externalities

Matthew Jeffers ()
Additional contact information
Matthew Jeffers: Hartford, CT, USA

Society and Economy, 2021, vol. 43, issue 1, 60-74

Abstract: Providers of insurance used to have no other choice than to absorb the behavioral externalities of their policy-holders. New technology coupled with the incentives of low-risk consumers has made it possible for firms to price-discriminate on the basis of behavioral risk and thus internalize behavioral externalities. While cost-internalization is generally a positive development, the introduction of behavioral tracking technologies also introduces new economic and social costs. This paper explores the economic and moral trade-offs of adopting behavioral tracking technologies in various insurance settings.

Keywords: privacy; behavioral externalities; pooling equilibria; separating equilibria; asymmetric information; price discrimination (search for similar items in EconPapers)
JEL-codes: D62 D82 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1556/204.2020.00030 (application/pdf)
subscription

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aka:soceco:v:43:y:2021:i:1:p:60-74

Ordering information: This journal article can be ordered from
Akadémiai Kiadó Zrt., P. O. Box 245, H-1519 Budapest, Hungary
https://akjournals.com/

Access Statistics for this article

Society and Economy is currently edited by Szent-Iványi, Balázs

More articles in Society and Economy from Akadémiai Kiadó, Hungary
Bibliographic data for series maintained by Kriston, Orsolya ().