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- Title
Asymmetric information in insurance: general testable implications.
- Authors
Chiappori, Pierre-André; Jullien, Bruno; Salanié, Bernard; Salanié, François
- Abstract
Several recent articles on empirical contract theory and insurance have tested for a positive correlation between coverage and ex post risk, as predicted by standard models of pure adverse selection or pure moral hazard. We show here that the positive correlationproperty can be extended to general setups: competitive insurance markets and cases where risk aversion is public. We test our results on a French dataset. Our tests confirm that the estimated correlation is positive; they also suggest the presence of market power.
- Publication
RAND Journal of Economics (Wiley-Blackwell), 2006, Vol 37, Issue 4, p783
- ISSN
0741-6261
- Publication type
Article
- DOI
10.1111/j.1756-2171.2006.tb00057.x