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Adverse selection in health insurance : are first best contracts impossible

Alary, David; Bien, Franck (2005), Adverse selection in health insurance : are first best contracts impossible. https://basepub.dauphine.fr/handle/123456789/5961

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Type
Document de travail / Working paper
Date
2005
Publisher
Université Paris-Dauphine
Series title
Cahiers de recherche d'EURISCO
Series number
2005-16
Published in
Paris
Pages
9
Metadata
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Author(s)
Alary, David
Bien, Franck
Abstract (EN)
In this note, we intend to characterize conditions such that adverse selection is irrelevant in health insurance. We show that a condition is that policyholders health status is sufficiently reduced by illness.
Subjects / Keywords
Adverse Selection; Health insurance; bivariate utility function; health status; optimal contract
JEL
D82 - Asymmetric and Private Information; Mechanism Design