| 来源类型 | Working Paper
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| 规范类型 | 报告
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| DOI | 10.3386/w22773
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| 来源ID | Working Paper 22773
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| Multidimensional Private Information, Market Structure and Insurance Markets |
| Hanming Fang; Zenan Wu
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| 发表日期 | 2016-10-31
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| 出版年 | 2016
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| 语种 | 英语
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| 摘要 | A large empirical literature found that the correlation between insurance purchase and ex post realization of risk is often statistically insignificant or negative. This is inconsistent with the predictions from the classic models of insurance a la Akerlof (1970), Pauly (1974) and Rothschild and Stiglitz (1976) where consumers have one-dimensional heterogeneity in their risk types. It is suggested that selection based on multidimensional private information, e.g., risk and risk preference types, may be able to explain the empirical findings. In this paper, we systematically investigate whether selection based on multidimensional private information in risk and risk preferences, can, under different market structures, result in a negative correlation in equilibrium between insurance coverage and ex post realization of risk. We show that if the insurance market is perfectly competitive, selection based on multidimensional private information does not result in negative correlation property in equilibrium, unless there is a sufficiently high loading factor. If the insurance market is monopolistic or imperfectly competitive, however, we show that it is possible to generate negative correlation property in equilibrium when risk and risk preference types are sufficiently negative dependent, a notion we formalize using the concept of copula. We also clarify the connections between some of the important concepts such as adverse/advantageous selection and positive/negative correlation property. |
| 主题 | Microeconomics
; Economics of Information
; Financial Economics
; Financial Institutions
; Public Economics
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| URL | https://www.nber.org/papers/w22773
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| 来源智库 | National Bureau of Economic Research (United States)
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| 引用统计 |
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| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/580446
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推荐引用方式
GB/T 7714 |
Hanming Fang,Zenan Wu. Multidimensional Private Information, Market Structure and Insurance Markets. 2016.
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文件名：
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w22773.pdf
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格式：
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Adobe PDF
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