Data Linkage between Markets: Does the Emergence of an Informed Insurer Cause Consumer Harm?

CEPR Discussion Paper 17947

77 Pages Posted: 17 Oct 2022 Last revised: 26 May 2023

See all articles by Claudia Herresthal

Claudia Herresthal

University of Bonn

Tatiana Mayskaya

National Research University Higher School of Economics - International College of Economics and Finance; National Research University Higher School of Economics - Faculty of Economics

Arina Nikandrova

City, University of London

Date Written: May 26, 2023

Abstract

A merger of two companies that are active in seemingly unrelated markets creates data linkage: by selling a product in one market, the merged company acquires informational advantage in a competitive insurance market. In the insurance market, the informed insurer earns an economic rent through cream-skimming. Some of this rent is competed away in the product market. Overall, the data linkage makes consumers better off. The role of competitiveness of each market, the possibility of market monopolization and the data-sharing requirement are discussed.

Keywords: insurance market, asymmetric information, data linkage, digital market

JEL Classification: D4, D82, G22, L22, L41, L86

Suggested Citation

Herresthal, Claudia and Mayskaya, Tatiana and Nikandrova, Arina, Data Linkage between Markets: Does the Emergence of an Informed Insurer Cause Consumer Harm? (May 26, 2023). CEPR Discussion Paper 17947, Available at SSRN: https://ssrn.com/abstract=4238784 or http://dx.doi.org/10.2139/ssrn.4238784

Claudia Herresthal

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

Tatiana Mayskaya

National Research University Higher School of Economics - International College of Economics and Finance ( email )

Pokrovski Bulvar 11, Korpus Zh, Office 715
Moscow, 109028
Russia

National Research University Higher School of Economics - Faculty of Economics ( email )

Shabolovka 26
Moscow, 119049
Russia

Arina Nikandrova (Contact Author)

City, University of London ( email )

London
United Kingdom
EC1V 0HB (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
116
Abstract Views
498
Rank
377,937
PlumX Metrics