CPI Antitrust Chronicle Submission, August 2014
9 Pages Posted: 23 Aug 2014
Date Written: August 21, 2014
Selection markets, like insurance and finance, where the value of customers depends on their identity, create fundamental challenges for competition policy. Competition is often harmful in these markets either by creating socially excessive supply or leading to degradation of product quality. Standard indicators used to gauge policies, such as upward pricing pressure, are also often mis-calibrated in these settings. We summarize for a policy audience and draw competition policy conclusions from two recent papers on the interaction between competition policy and selection, using calibrations to sub-prime auto lending and health insurance.
Keywords: competition policy, selection markets, cream-skimming, merger analysis, sub-prime lending, health insurance
JEL Classification: D40, D82, G20, I11, K21, L41
Suggested Citation: Suggested Citation
Mahoney, Neale and Veiga, Andre and Weyl, E. Glen, Competition Policy in Selection Markets (August 21, 2014). CPI Antitrust Chronicle Submission, August 2014. Available at SSRN: https://ssrn.com/abstract=2484738 or http://dx.doi.org/10.2139/ssrn.2484738