Multidimensional screening in a monopolistic insurance market
Olivella, Pau (Universitat Autònoma de Barcelona. Departament d'Economia i d'Història Econòmica)
Schroyen, Fred (Norwegian School of Economics)

Data:	2014
Resum:	We consider a population of individuals who differ in two dimensions, their risk type (expected loss) and their risk aversion, and solve for the profit-maximising menu of contracts that a monopolistic insurer puts out on the market. Our findings are threefold. First, it is never optimal to fully separate all the types. Second, if heterogeneity in risk aversion is sufficiently high, then some high-risk individuals (the risk-tolerant ones) will obtain lower coverage than some low-risk individuals (the risk-averse ones). Third, because women tend to be more risk averse than men (in that the risk aversion distribution for women first-order stochastically dominates that for men), gender discrimination may lead to a Pareto improvement.
Ajuts:	Ministerio de Educación y Ciencia ECO2009-07616 Agència de Gestió d'Ajuts Universitaris i de Recerca 2005/SGR-00836 Ministerio de Economía y Competitividad ECO2012-31962
Nota:	Support from the Government of Catalonia project 2005SGR00836 and the Barcelona GSE Research Network, as well as from the Ministerio de Educación y Ciencia, project ECO2009-07616 and CONSOLIDER-INGENIO 2010(CSD2006-0016)
Nota:	Altres ajuts: CONSOLIDER-INGENIO/CSD2006-0016
Drets:	Tots els drets reservats.
Llengua:	Anglès
Document:	Article ; recerca ; Versió acceptada per publicar
Matèria:	Insurance markets ; Asymmetric information ; Screening ; Gender discrimination ; Positive correlation test
Publicat a:	The Geneva Risk and Insurance Review, Vol. 39 (2014) , p. 90-130, ISSN 1554-964X

DOI: 10.1057/grir.2014.1

Postprint 51 p, 1.4 MB

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