Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63020 
Year of Publication: 
2000
Series/Report no.: 
Memorandum No. 2000,39
Publisher: 
University of Oslo, Department of Economics, Oslo
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

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