Attar, Andrea, Mariotti, Thomas and Salanié, François (2021) Regulating insurance markets: multiple contracting and adverse selection. TSE Working Paper, n. 19-1033, Toulouse

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We study insurance markets in which privately informed consumers can purchase coverage from several firms whose pricing strategies are subject to an anti-dumping regulation. The resulting regulated game supports a single allocation in which each layer of coverage is fairly priced given the consumer types who purchase it. This competitive allocation cannot be Pareto-improved by a social planner who can neither observe consumer types nor monitor their trades with firms. Accordingly, we argue that public intervention under multiple contracting and adverse selection should penalize firms that cross-subsidize between contracts, while leaving consumers free to choose their preferred amount of coverage.

Item Type: Monograph (Working Paper)
Language: English
Date: 9 September 2021
Place of Publication: Toulouse
Uncontrolled Keywords: Insurance Markets, Regulation, Multiple Contracting, Adverse Selection.
JEL Classification: D43 - Oligopoly and Other Forms of Market Imperfection
D82 - Asymmetric and Private Information
D86 - Economics of Contract - Theory
Divisions: TSE-R (Toulouse)
Institution: UniversitéToulouse 1 Capitole
Site: UT1
Date Deposited: 30 Aug 2019 07:40
Last Modified: 03 Mar 2023 08:57
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