Document de travail

Regulating Insurance Markets: Multiple Contracting and Adverse Selection

Andrea Attar, Thomas Mariotti et François Salanié

Résumé

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.

Mots-clés

Insurance Markets, Regulation, Multiple Contracting, Adverse Selection.;

Codes JEL

  • D43: Oligopoly and Other Forms of Market Imperfection
  • D82: Asymmetric and Private Information • Mechanism Design
  • D86: Economics of Contract: Theory

Référence

Andrea Attar, Thomas Mariotti et François Salanié, « Regulating Insurance Markets: Multiple Contracting and Adverse Selection », TSE Working Paper, n° 19-1033, août 2019, révision septembre 2021.

Voir aussi

Publié dans

TSE Working Paper, n° 19-1033, août 2019, révision septembre 2021