Entry-Proofness and Market Breakdown under Adverse Selection

Attar, Andrea, Mariotti, Thomas and Salanié, François (2017) Entry-Proofness and Market Breakdown under Adverse Selection. TSE Working Paper, n. 17-788, Toulouse

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Official URL: http://tse-fr.eu/pub/31582

Abstract

This paper develops a unified approach to entry-proofness in adversely selected markets. We first provide a necessary and sufficient condition for entry on an inactive market to be unprofitable. For active markets, we characterize the unique budgetbalanced market tariff preventing entry by a seller offering complementary trades. These results yield sharp predictions for competitive outcomes of nonexclusive markets, which we use to construct a new test for evidence of private information in insurance.

Item Type: Monograph (Working Paper)
Language: English
Date: March 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Adverse Selection, Entry Proofness, Market Breakdown, Nonexclusivity
JEL codes: D43 - Oligopoly and Other Forms of Market Imperfection
D82 - Asymmetric and Private Information
D86 - Economics of Contract - Theory
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse), TSM Research (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 24 Mar 2017 13:33
Last Modified: 23 May 2019 07:29
OAI ID: oai:tse-fr.eu:31582
URI: http://publications.ut-capitole.fr/id/eprint/23268

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