De Economist

, Volume 163, Issue 1, pp 25–60 | Cite as

Insurance Search, Switching Behavior and the Role of Group Contracts

  • Jonneke Bolhaar
  • Maarten Lindeboom
  • Bas van der KlaauwEmail author


This paper considers consumer behavior in the Dutch market for health insurances, which is characterized by managed competition. We observe substantial price dispersion for the same basic insurance package. We describe the market by a simple consumer search model, which we empirically test using data from the Dutch Health Care Consumer Panel. We argue that insurers use group contracts to target discounts to better informed consumers, reducing their incentives to search. Since search is essential for competition, this increases premiums and premium dispersion.


Health insurance Group discounts Consumer search Managed competition Reform 

JEL Classification

D83 I13 I18 


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Jonneke Bolhaar
    • 1
  • Maarten Lindeboom
    • 2
  • Bas van der Klaauw
    • 2
    Email author
  1. 1.CPB Netherlands Bureau for Economic Policy AnalysisDen HaagThe Netherlands
  2. 2.Department of EconomicsVU University AmsterdamAmsterdamThe Netherlands

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