Resource title

Adverse selection in an insurance market with government-guaranteed subsistence levels

Resource image

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Resource description

We consider a competitive insurance market with adverse selection. Unlike the standard models, we assume that individuals receive the benefit of some type of potential government assistance that guarantees them a minimum level of wealth. For example, this assistance might be some type of government-sponsored relief program, or it might simply be some type of limited liability afforded via bankruptcy laws. Government assistance is calculated ex post of any insurance benefits. This alters the individuals? demand for insurance coverage. In turn, this affects equilibria in various insurance models of markets with adverse selection.

Resource author

Bum J. Kim, Harris Schlesinger

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/18856

Resource license

Adapt according to the presented license agreement and reference the original author.