Adverse Selection in an Insurance Market with Government-Guaranteed Subsistence Levels
29 Pages Posted: 29 Jun 2004
There are 2 versions of this paper
Adverse Selection in an Insurance Market with Government-Guaranteed Subsistence Levels
Adverse Selection in an Insurance Market with Government-Guaranteed Subsistence Levels
Date Written: June 2004
Abstract
We consider a competitive insurance market with adverse selection. Unlike the standard models, we assume that individuals receive the benefit of some type of potential government assistance that guarantees them a minimum level of wealth. For example, this assistance might be some type of government-sponsored relief program, or it might simply be some type of limited liability afforded via bankruptcy laws. Government assistance is calculated ex post of any insurance benefits. This alters the individuals' demand for insurance coverage. In turn, this affects equilibria in various insurance models of markets with adverse selection.
Keywords: adverse selection, insurance, government relief
JEL Classification: D82, G22, H29
Suggested Citation: Suggested Citation
Here is the Coronavirus
related research on SSRN
Recommended Papers
-
Equilibrium in Competitive Insurance Markets with Moral Hazard
-
Moral Hazard and Non-Exclusive Contracts
By Alberto Bisin and Danilo Guaitoli
-
Incentives and Government Relief for Risk
By Louis Kaplow
-
Can Financial Markets Be Tapped to Help Poor People Cope with Weather Risks?
By Jerry R. Skees, Panos Varangis, ...
-
Recent Work on Business Cycles in Historical Perspective: Review of Theories and Evidence
