Thumbnail

Insurance contracts with imprecise probabilities and adverse selection

Jeleva, Meglena; Villeneuve, Bertrand (2004), Insurance contracts with imprecise probabilities and adverse selection, Economic theory, 23, 4, p. 777-794. http://dx.doi.org/10.1007/s00199-003-0396-x

View/Open
Type
Article accepté pour publication ou publié
Date
2004
Journal name
Economic theory
Volume
23
Number
4
Publisher
Springer
Pages
777-794
Publication identifier
Metadata
Show full item record
Author(s)
Jeleva, Meglena
Villeneuve, Bertrand cc
Abstract (EN)
This article deals with optimal insurance contracts in the framework of imprecise probabilities and adverse selection. Agents differ not only in the objective risk they face but also in the perception of risk. In monopoly, a range of configurations that VNM preferences preclude appears: a pooling contract may be optimal, incomplete coverage may be offered to high risks, low risks may be better covered.
Subjects / Keywords
Imprecise probabilities; Insurance markets; Adverse selection
JEL
G22 - Insurance; Insurance Companies; Actuarial Studies
D82 - Asymmetric and Private Information; Mechanism Design
D81 - Criteria for Decision-Making under Risk and Uncertainty