EconPapers    
Economics at your fingertips  
 

Insurance monopoly and renegotiation (*)

Geir Asheim () and Tore Nilssen ()

Economic Theory, 1997, vol. 9, issue 2, 354 pages

Abstract: The mechanism design problem of a monopoly insurer - faced with privately informed insurees - is considered. It is assumed that the insurer cannot commit not to renegotiate (by using the information that customer separa-tion reveals) before contracts are put into force. A solution is offered by modeling renegotiation-proofness in a framework inspired by Greenberg's theory of social situations. Maximizing profit within the set of renegotiation-proof outcomes always leads to a semi-separating outcome (i.e. neither full pooling nor full separation can occur) and may leave all low-risks as well as some of the high-risks self-insured.

Date: 1997
Note: Received: March 1, 1994; revised version September 16, 1995
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:joecth:v:9:y:1997:i:2:p:341-354

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

 
Page updated 2020-09-07
Handle: RePEc:spr:joecth:v:9:y:1997:i:2:p:341-354