Preliminary investigations for better monitoring. Learning in repeated insurance audits
Reda Aboutajdine and
Working Papers from HAL
Audit mechanisms frequently take place in the context of repeated relationships between auditor and auditee. This paper focuses attention on the insurance fraud problem in a setting where insurers repeatedly verify claims satisfied by service providers (e.g., affiliated car repairers or members of managed care networks). We highlight a learning bias that leads insurers to over-audit service providers at the beginning of their relationship. The paper builds a bridge between the literature on optimal audit in insurance and the exploitation/exploration trade-off in multi-armed bandit problems.
Keywords: learning; optimal auditing; ex-post moral hazard; insurance fraud (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-ias and nep-mic
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01713420
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Journal Article: Preliminary Investigations for Better Monitoring: Learning in Repeated Insurance Audits (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01713420
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