Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63020
Authors: 
Lund, Diderik
Nilssen, Tore
Year of Publication: 
2000
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2000,39
Abstract: 
We discuss the prevalence of pooling equilibria in a two-period model of an insurance market with asymmetric information. We solve the model numerically. In addition to reporting cases where a pooling equilibrium exists, we pay attention to why, in the case of non-existence of a pooling equilibrium, this is so. In addition to the phenomenon of cream skimming emphasized in earlier literature, we here point to the the importance of the opposite: dregs skimming, whereby high-risk consumers are profitably detracted from the candidate pooling contract.
JEL: 
D82
G22
L14
Document Type: 
Working Paper

Files in This Item:
File
Size
495.32 kB





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