A note on health insurance under ex post moral hazard

Abstract : In the linear coinsurance problem, examined first by Mossin (1968), a higher risk aversion with respect to wealth in the sense of Arrow-Pratt implies a higher optimal coinsurance rate. We show that this property does not hold for health insurance under ex post moral hazard, i.e., when illness severity cannot be observed by insurers and policyholders decide on their health expenditures. The optimal coinsurance rate trades off a risk sharing effect and an incentive effect, both related to risk aversion.
Document type :
Preprints, Working Papers, ...
Complete list of metadatas

Cited literature [15 references]  Display  Hide  Download

https://hal-polytechnique.archives-ouvertes.fr/hal-01385520
Contributor : Mariame Seydi <>
Submitted on : Friday, October 21, 2016 - 3:02:46 PM
Last modification on : Wednesday, January 23, 2019 - 10:29:31 AM

File

Cahier n° 2016-17_PICARD.pdf
Files produced by the author(s)

Identifiers

  • HAL Id : hal-01385520, version 1

Collections

Citation

Pierre Picard. A note on health insurance under ex post moral hazard . 2016. ⟨hal-01385520⟩

Share

Metrics

Record views

300

Files downloads

1101