Cream Skimming, Dregs Skimming, and Pooling: On the Dynamics of Competitive Screening

Diderik Lund and Tore Nilssen ()

The Geneva Papers on Risk and Insurance Theory, 2004, vol. 29, issue 1, 23-41

Abstract: We discuss the existence of a pooling equilibrium in a two-period model of an insurance market with asymmetric information. We solve the model numerically. We pay particular attention to the reasons for non-existence in cases where no pooling equilibrium exists. In addition to the phenomenon of cream skimming emphasized in earlier literature, we here point to the importance of the opposite: dregs skimming, whereby high-risk consumers are profitably detracted from the candidate pooling contract.

Date: 2004
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://journals.kluweronline.com/issn/0926-4957/contents (text/html)
Access to full text is restricted to subscribers.

Related works:
Journal Article: Cream Skimming, Dregs Skimming, and Pooling: On the Dynamics of Competitive Screening (2004)
Working Paper: Cream Skimming, Dregs Skimming, and Pooling: On the Dynamics of Competitive Screening (2003)
Working Paper: Cream skimming, dregs skimming, and pooling: on the dynamics of competitive screening (2000)
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:kap:geneva:v:29:y:2004:i:1:p:23-41

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10713

Access Statistics for this article

The Geneva Papers on Risk and Insurance Theory is currently edited by Michael Hoy and Nicolas Treich

More articles in The Geneva Papers on Risk and Insurance Theory from Springer, International Association for the Study of Insurance Economics (The Geneva Association) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().