Adverse selection and optimum insurance policies

Eytan Sheshinski

MPRA Paper from University Library of Munich, Germany

Abstract: This paper considers how insurance companies choose a price schedule for policies depending on the size of these policies which are determined by households. Under asymmetric information, we analyse the tension between self-selection and the density distribution of household by accident probability. The profit maximizing policy is compared to the socially optimal policy.

Keywords: Insurance; Accident probabilities; self-selection (search for similar items in EconPapers)
JEL-codes: H0 (search for similar items in EconPapers)
Date: 1977
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/70329/1/MPRA_paper_70329.pdf original version (application/pdf)

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:pra:mprapa:70329

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().