Economic Theory

, Volume 23, Issue 4, pp 777–794 | Cite as

Insurance contracts with imprecise probabilities and adverse selection

Original Paper

Summary.

This article deals with optimal insurance contracts in the framework of imprecise probabilities and adverse selection. Agents differ not only in the objective risk they face but also in the perception of risk. In monopoly, a range of configurations that VNM preferences preclude appears: a pooling contract may be optimal, incomplete coverage may be offered to high risks, low risks may be better covered.

Keywords and Phrases:

Imprecise probabilities Insurance markets Adverse selection. 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Copyright information

© Springer-Verlag Berlin/Heidelberg 2004

Authors and Affiliations

  1. 1.LEN-C3EUniversité de Nantes, EUREQuaParis Cedex 13FRANCE
  2. 2.CEA-IDEI Université de Toulouse 1Toulouse CedexFRANCE

Personalised recommendations