Competitive Failures in Insurance Markets
Competitive Failures in Insurance Markets

Author: Pierre-André Chiappori

Publisher: MIT Press (MA)

Published: 2006

Total Pages: 328

ISBN-13: 9780262033527

DOWNLOAD EBOOK

Leading international economists offer new insights on recent developments in theeconomic analysis of the limits of insurability, with particular attention of adverse selection andmoral hazard.

Morality, Competition, and the Firm
Morality, Competition, and the Firm

Author: Joseph Heath

Publisher: Oxford University Press

Published: 2014-08-01

Total Pages: 425

ISBN-13: 0199990492

DOWNLOAD EBOOK

In this collection of provocative essays, Joseph Heath provides a compelling new framework for thinking about the moral obligations that private actors in a market economy have toward each other and to society. In a sharp break with traditional approaches to business ethics, Heath argues that the basic principles of corporate social responsibility are already implicit in the institutional norms that structure both marketplace competition and the modern business corporation. In four new and nine previously published essays, Heath articulates the foundations of a "market failures" approach to business ethics. Rather than bringing moral concerns to bear upon economic activity as a set of foreign or externally imposed constraints, this approach seeks to articulate a robust conception of business ethics derived solely from the basic normative justification for capitalism. The result is a unified theory of business ethics, corporate law, economic regulation, and the welfare state, which offers a reconstruction of the central normative preoccupations in each area that is consistent across all four domains. Beyond the core theory, Heath offers new insights on a wide range of topics in economics and philosophy, from agency theory and risk management to social cooperation and the transaction cost theory of the firm.

Risky Business
Risky Business

Author: Liran Einav

Publisher: Yale University Press

Published: 2023-01-31

Total Pages: 282

ISBN-13: 0300268556

DOWNLOAD EBOOK

An engaging and accessible examination of what ails insurance markets—and what to do about it—by three leading economists Why is dental insurance so crummy? Why is pet insurance so expensive? Why does your auto insurer ask for your credit score? The answer to these questions lies in understanding how insurance works. Unlike the market for other goods and services—for instance, a grocer who doesn’t care who buys the store’s broccoli or carrots—insurance providers are more careful in choosing their customers, because some are more expensive than others. Unraveling the mysteries of insurance markets, Liran Einav, Amy Finkelstein, and Ray Fisman explore such issues as why insurers want to know so much about us and whether we should let them obtain this information; why insurance entrepreneurs often fail (and some tricks that may help them succeed); and whether we’d be better off with government-mandated health insurance instead of letting businesses, customers, and markets decide who gets coverage and at what price. With insurance at the center of divisive debates about privacy, equity, and the appropriate role of government, this book offers clear explanations for some of the critical business and policy issues you’ve often wondered about, as well as for others you haven’t yet considered.

Efficient Monopolies
Efficient Monopolies

Author: Thomas von Ungern-Sternberg

Publisher: OUP Oxford

Published: 2004-02-26

Total Pages: 172

ISBN-13: 0191533351

DOWNLOAD EBOOK

This book presents startling evidence that state monopolies can produce better outcomes than the free market. It provides an empirical comparison of the property insurance market in five European countries: Britain, Spain, France, Switzerland, and Germany. The market and cost structures of insurers in each country are described, and particular features of each market and the outcomes for customers examined. The regulatory frameworks vary widely from country to country and so do the market outcomes, both in terms of premium level and in terms of available insurance cover. In view of the increase in major floods and other forms of natural damage (such as subsidence) over the last decades, the non-availability of insurance cover in many competitive insurance systems is likely to become a major political issue. This book shows that state monopoly is an adequate policy response. Competitive insurance systems are shown to provide incomplete cover at a substantially higher cost. In mixed systems, where the private sector can obtain reinsurance from the state (such a system is being tried in France) the state tends to end up paying most of the costs (it reinsures most of the bad risks) while the private insurance companies keep most of the premium income. The book will be of interest to academic economists interested in privatization, regulation, the theory of the firm, and insurance; Policy-makers concerned with regulation and privatization; Insurance companies, regulators, and analysts.

Insurance Markets with Interdependent Risks
Insurance Markets with Interdependent Risks

Author: Wing Yan Shiao

Publisher:

Published: 2016

Total Pages: 46

ISBN-13:

DOWNLOAD EBOOK

This paper investigates an insurance market with adverse selection, moral hazard and across-contract endogeneity, under monopoly and perfect competition. We characterize the equilibrium in a market without endogeneity and study how the introduction of across-contract endogeneity into the model distorts the optimal contracts. The across-contract endogeneity can be viewed as a second source of endogeneity, in addition to moral hazard, that further reduces insurance coverage if the insurer considers its implication when choosing contracts. We show that a monopolist internalizes the externality exerted by the contracts and offers contracts with less coverage, which induce a lower level of average risk. Competitive insurers fail to account for the interdependence of risks and do not adjust accordingly. They offer excessive insurance, which leads to a higher level of average risk and creates inefficiency. Our analysis suggests that there is a trade-off between monopoly and perfect competition.