Insurance, Transaction Costs, and Market Segmentation When There is No Adverse Selection

Yann Braouezec
Additional contact information
Yann Braouezec: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: Computer mediated transactions allow insurance companies to customize their contracts, while transaction costs limit this tendency toward customization. To capture this phenomenon, we develop a complete-information framework in which it is costly to design a new market segment when the segmentation policy (number and design of segments) is endogenously chosen. Both the case of a private and a public insurer are considered. Without transaction costs, these two insurance systems are equivalent in terms of social welfare and participation. With transaction costs, this equivalence is no longer present, and the analysis of this difference is the subject of this article.

Keywords: Insurance; participation; transaction costs; mixed-integer programming; social welfare (search for similar items in EconPapers)
Date: 2013-01
References: Add references at CitEc
Citations:

Published in SSRN : Social Science Research Network, 2013, ⟨10.2139/ssrn.2362985⟩

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:hal:journl:hal-01914212

DOI: 10.2139/ssrn.2362985

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().