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dc.contributor.authorNetzer, Nicken_US
dc.contributor.authorScheuer, Florianen_US
dc.date.accessioned2009-01-28T15:47:36Z-
dc.date.available2009-01-28T15:47:36Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/18507-
dc.description.abstractWe examine equilibria in competitive insurance markets when individuals take unobservable labor supply decisions. Precautionary labor motives introduce countervailing incentives in the insurance market, and equilibria with positive profits can occur even in the standard case in which individuals exogenously differ in risk only. We then extend the model to allow for both privately known risks and labor productivities. This endogenously introduces two-dimensional heterogeneity in the insurance market since precautionary labor effects lead to differences in income and hence risk aversion. Under these circumstances, separating and pooling equilibria exist, which generally differ from those with exogenous two-dimensional heterogeneity considered by the existing literature. Notably, in contrast to standard screening models, profits may be increasing with insurance coverage, and the correlation between risk and coverage can be zero or negative in equilibrium, a phenomenon frequently observed in empirical studies.en_US
dc.language.isoengen_US
dc.publisherDeutsches Institut für Wirtschaftsforschung (DIW) Berlinen_US
dc.relation.ispartofseriesDIW-Diskussionspapiere 614en_US
dc.subject.jelJ22en_US
dc.subject.jelG22en_US
dc.subject.jelD82en_US
dc.subject.ddc330en_US
dc.subject.keywordInsurance Marketsen_US
dc.subject.keywordAdverse Selectionen_US
dc.subject.keywordPrecautionary Laboren_US
dc.subject.stwVersicherungsmarkten_US
dc.subject.stwArbeitsangeboten_US
dc.subject.stwAdverse Selectionen_US
dc.subject.stwTheorieen_US
dc.titleCompetitive Screening in Insurance Markets with Endogenous Labor Supplyen_US
dc.typeWorking Paperen_US
dc.identifier.ppn518571548en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
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DIW-Diskussionspapiere

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