Resource title

Cream Skimming, Dregs Skimming, and Pooling - On the Dynamics of Competitive Screening

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Resource description

AbstractWe discuss the existence of a pooling equilibrium in a two-period modelof an insurance market with asymmetric information. We solve the modelnumerically. We pay particular attention to the reasons for non-existencein cases where no pooling equilibrium exists. In addition to the phenom-enon of cream skimming emphasized in earlier literature, we here pointto the the importance of the opposite: dregs skimming, whereby high-riskconsumers are pro√ětably detracted from the candidate pooling contract.

Resource author

Diderik Lund, Tore Nilssen

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Resource language

eng

Resource content type

application/pdf

Resource resource URL

http://hdl.handle.net/10398/7596

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