Arbeitspapier
Hidden Insurance in a Moral Hazard Economy
We consider an economy where individuals privately choose effort and trade competitively priced securities that pay off with effort-determined probability. We show that if insurance against a negative shock is sufficiently incomplete, then standard functional form restrictions ensure that individual objective functions are optimized by an effort and insurance combination that is unique and satisfies first- and second-order conditions. Modeling insurance incompleteness in terms of costly production of private insurance services, we characterize the constrained inefficiency arising in general equilibrium from competitive pricing of nonexclusive financial contracts.
- Sprache
-
Englisch
- Erschienen in
-
Series: IZA Discussion Papers ; No. 7806
- Klassifikation
-
Wirtschaft
Macroeconomics: Consumption; Saving; Wealth
Criteria for Decision-Making under Risk and Uncertainty
Asymmetric and Private Information; Mechanism Design
- Thema
-
hidden action
principal agent
first-order approach
constrained efficiency
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bertola, Giuseppe
Koeniger, Winfried
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for the Study of Labor (IZA)
- (wo)
-
Bonn
- (wann)
-
2013
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Bertola, Giuseppe
- Koeniger, Winfried
- Institute for the Study of Labor (IZA)
Entstanden
- 2013
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