Full-text resources of CEJSH and other databases are now available in the new Library of Science.
Visit https://bibliotekanauki.pl

Refine search results

Journals help

  1. 1 Kozgazdasagi Szemle (Economic Review)

Years help

  1. 1 2006

Authors help

  1. 1 Simonovits A.

Results found: 1

first rewind previous Page / 1 next fast forward last

Search results

Search:
in the keywords:  ASYMMETRICAL INFORMATION
help Sort By:

help Limit search:
first rewind previous Page / 1 next fast forward last
1

Can everybody win by redistribution? Compulsory insurance and asymmetrical information.

100%
Simonovits A.
Kozgazdasagi Szemle (Economic Review)
|
2006
|
vol. 53
|
issue 10
873-879
EN
Rothschild and Stiglitz (1976) examined primarily neutral insurance (non-redistributive) in a case of asymmetrical information. In their basic model, the insurer is unaware whether the insured is low or high-risk, and so the low-risk individuals have to shoulder an own risk that keeps high-risk individuals from presenting themselves as low-risk (second best solution). The authors also examine, in a model variant, optimum cross-subsidization, but this has been largely overlooked in the literature. This study extends the analysis to the cases of compulsory and redistributive insurance, and shows that for both types it is worth taking out full insurance, but everybody must pay for the average risk. In cases of great risk evasion or great damage, or of the presence of relatively few low-risk individuals, increases the utility not only for the high-risk type, but for the low-risk type as well: the second best redistribution Pareto-dominates the neutral solution.
first rewind previous Page / 1 next fast forward last
JavaScript is turned off in your web browser. Turn it on to take full advantage of this site, then refresh the page.