Essays on insurance markets

This dissertation consists of three chapters on adverse-selection type insurance markets. Chapter 1 develops a model for analyzing non-exclusive insurance markets. It establishes that the "screening" considerations of models following Rothschild and Stiglitz (1976)-long applied for analysis of exclusive-contract insurance markets-also apply when contracting is non-exclusive and contracts are linearly priced. It characterizes the contracts offered in efficient markets and shows that screening and non-exclusivity together impose significant restrictions on the structure of insurance policies. In a two risk-type market for retirement annuities, market efficiency requires that either all annuities purchased will provide declining real income streams or else all will provide rising income streams. Chapters 2 and 3 examine the consequences of regulations which restrict the use of characteristic-based pricing in exclusive contracting insurance markets. Chapter 2 argues that restrictions on pricing on the basis of observable characteristics such as gender, race, or the outcomes of genetic tests are undesirable, since the distributional goals of these restrictions can be accomplished more efficiently by employing social insurance.

Department dc:contributor.department

Massachusetts Institute of Technology. Dept. of Economics.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2006

Author dc:creator

• Rothschild, Casey

Advisor dc:contributor.advisor

• Muhamet Yildiz.

• Economics.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/34511
• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Identifier URI

http://dspace.mit.edu/handle/1721.1/34511

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/34511