EconStor >
Goethe-Universität Frankfurt am Main >
Center for Financial Studies (CFS), Universität Frankfurt a. M.  >
CFS Working Paper Series, Universität Frankfurt a. M. >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/25505
  
Title:On the role of patience in an insurance market with asymmetric information PDF Logo
Authors:Sonnenholzner, Michael
Wambach, Achim
Issue Date:2006
Series/Report no.:CFS Working Paper 2007/04
Abstract:We analyse a 2-period competitive insurance market which is characterized by the simultaneous presence of standard moral hazard and adverse selection with regard to consumer time preferences. It is shown that there exists an equilibrium in which patient consumers use high effort and buy a profit-making insurance contract with high coverage, whereas impatient consumers use low effort and buy a contract with low coverage or even remain uninsured. This finding may help to explain why positive profits and the opposite of adverse selection with regard to risk types can sometimes be observed empirically.
Subjects:Insurance
Patience
Adverse Selection
Moral Hazard
JEL:D82
G22
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-38130
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

Files in This Item:
File Description SizeFormat
527622532.PDF389.26 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/25505

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.