A Note on Health Insurance under Ex Post Moral Hazard
AbstractIn the linear coinsurance problem, examined first by Mossin (1968), a higher absolute 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. View Full-Text
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Picard, P. A Note on Health Insurance under Ex Post Moral Hazard. Risks 2016, 4, 38.
Picard P. A Note on Health Insurance under Ex Post Moral Hazard. Risks. 2016; 4(4):38.Chicago/Turabian Style
Picard, Pierre. 2016. "A Note on Health Insurance under Ex Post Moral Hazard." Risks 4, no. 4: 38.
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