Equilibrium in Competitive Insurance Markets, The Welfare Economics of Moral Hazard: Basic Analytics

Richard Arnott and Joseph Stiglitz

Working Paper from Economics Department, Queen's University

Abstract: This paper is the first in a series. Among the results are: 1) Indifference curves between premiums and payouts are not generally quasi-concave; as a result the price- and income-consumption lines are generally not continuous; 2) Accident prevention effort is generally not continuous or monotonic in the parameters of the insurance contract; 3) The set of feasible insurance contracts, is not generally convex.

Pages: 36
Date: 1982
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Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:465

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