ON THE REVELATION OF ASYMMETRIC INFORMATION OF THE PRIVATE INSURANCE COMPANIES IN THE US CROP INSURANCE PROGRAM

Alan Ker and A. Tolga Ergun

No 21898, 2003 Annual meeting, July 27-30, Montreal, Canada from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: The participation of intermediaries in either public policy or private markets can be justified on the basis of efficiency gains. With respect to private insurance company involvement in the U.S. crop insurance program, efficiency gains may arise from either decreased transaction costs through better established delivery channels and/or the revelation of asymmetric information. Although anecdotal evidence indicates that delivery costs are excessive that question is better left for forensic accountants. We focus on the revelation of asymmetric information. Specifically, we test if insurance companies reveal asymmetric information to the government via their allocation decisions and discuss the policy implications.

Keywords: Risk; and; Uncertainty (search for similar items in EconPapers)
Pages: 24
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea03:21898

DOI: 10.22004/ag.econ.21898

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