Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76330 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 873
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
When information on longevity (survival functions) is unknown early in life, individuals have an interest to insure themselves against future 'risk-class' classification. Accordingly, the First-Best typically involves transfers across states of nature. Competitive equilibrium cannot provide such transfers if insurance firms are unable to precommit their customers. On the other hand, public insurance plans that do not distinguish between 'risk-class' realizations are also inefficient. It is impossible, a-priori, to rank these alternatives from a welfare point of view.
Document Type: 
Working Paper
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