Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80485
Authors: 
Fels, Markus
Year of Publication: 
2013
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2013: Wettbewerbspolitik und Regulierung in einer globalen Wirtschaftsordnung - Session: Household Behavior C12-V1
Abstract: 
We analyze how customers with limited attention value and choose among health plans. We show how the model can accommodate three observations regarding plan choice. First, people tend to overweight the premium and thus underappreciate the value of health insurance. Second, insurance companies may have a strong incentive to reduce quality and to hide these shortcomings in the fine print while attracting customers with insufficiently lower premiums. Finally, the willingness-to-pay for insurance is subadditive creating an incentive for providers to unbundle comprehensive plans. We discuss how these three effects may result in a fundamental dilemma for policy makers.
JEL: 
D18
D89
I11
Document Type: 
Conference Paper

Files in This Item:
File
Size





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