Adverse Selection in an Insurance Market with Government-Guaranteed Subsistence Levels

15 Pages Posted: 19 Feb 2005

See all articles by Bum J. Kim

Bum J. Kim

affiliation not provided to SSRN

Harris Schlesinger

University of Alabama; CESifo (Center for Economic Studies and Ifo Institute)

Multiple version iconThere are 2 versions of this paper

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 the equilibria in various insurance models of markets with adverse selection.

Suggested Citation

Kim, Bum J. and Schlesinger, Harris, Adverse Selection in an Insurance Market with Government-Guaranteed Subsistence Levels. Available at SSRN: https://ssrn.com/abstract=669218

Bum J. Kim (Contact Author)

affiliation not provided to SSRN

Harris Schlesinger

University of Alabama ( email )

P.O. Box 870244
200 Alston Hall, Box 870224
Tuscaloosa, AL 35487
United States
205-348-7858 (Phone)
205-348-0590 (Fax)

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
12
Abstract Views
1,027
PlumX Metrics