Games with Money and Status: How Best to Incentivize Work

Pradeep Dubey and John Geanakoplos ()
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John Geanakoplos: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/john-geanakoplos

No 2167, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We consider the Rothschild-Stiglitz model of insurance but without the exclusivity constraint. It turns out that there always exists a unique equilibrium, in which the reliable and unreliable consumers take out a primary insurance up to its quantity limit, and the unreliable take out further secondary insurance at a higher premium. We provide a simple proof of this result (extended to multiple types of consumers) with the hope that it may be pedagogically useful.

Keywords: Non-exclusive insurance; Free entry; Adverse selection; Primary-secondary insurance (search for similar items in EconPapers)
JEL-codes: D43 D82 D86 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2019-02
New Economics Papers: this item is included in nep-gth, nep-ias and nep-mic
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Related works:
Working Paper: Games with Money and Status: How Best to Incentivize Work (2016)
Working Paper: Games with Money and Status: How Best to Incentivize Work (2014)
Working Paper: Games with Money and Status: How Bes to Incentivize Work (2014)
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