Insurance Market Games: Scale Effects and Public Policy

Michael Powers (), Martin Shubik and Shuntian Yao
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Shuntian Yao: Victoria University of Wellington

No 1076, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We propose a game-theoretic model to study various effects of scale in an insurance market. After reviewing a simple static model, we present a one-period game in which both the buyers and sellers of insurance make strategic bids, and show that, under reasonably broad conditions, market equilibrium exists. For a special case, we then consider how both the price and quantity of insurance, as well as other quantities of interest to public policy decision makers, are affected by the number of insurance firms, the number of customers, and the total amount of capital provided by investors.

Keywords: Insurance market games; scale effects; public policy (search for similar items in EconPapers)
Pages: 26 pages
Date: 1994-08
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Citations: View citations in EconPapers (6)

Published in Zeitschrift fur Nationalokonomie (Journal of Economics) (1998), 67(2): 109-134

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Journal Article: Insurance market games: Scale effects and public policy (1998)
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