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Competition between insurers with superior information

Villeneuve, Bertrand (2005), Competition between insurers with superior information, European economic review, 49, 2, p. 321-340. http://dx.doi.org/10.1016/S0014-2921(03)00047-3

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Type
Article accepté pour publication ou publié
Date
2005
Nom de la revue
European economic review
Volume
49
Numéro
2
Éditeur
Elsevier
Pages
321-340
Identifiant publication
Métadonnées
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Auteur(s)
Villeneuve, Bertrand cc
Résumé (EN)
We analyze markets where insurers are better informed about risk than consumers. We show that even competitive markets may result in insufficient information revelation and inefficient insurance coverage. This explains why certain risky consumers remain uninsured and why certain market segments are persistently profitable. We also show robustness to competition in menus or mechanisms. Our analysis of the “contrary of adverse selection” (competition between principals with common value and exclusivity) is suitable for other markets (lawyers, doctors, mechanics, etc.).
Mots-clés
Informed principals; Common value; Competition in mechanisms; Insurance markets; Adverse selection
JEL
G22 - Insurance; Insurance Companies; Actuarial Studies
D82 - Asymmetric and Private Information; Mechanism Design
D43 - Oligopoly and Other Forms of Market Imperfection