Endogenous insolvency in the Rothschild-Stiglitz model
Título: Endogenous insolvency in the Rothschild-Stiglitz model / Wanda Mimra, Achim Wambach
Autor: Mimra, Wanda
Notas: Sumario: Even 30 years after Rothschild and Stiglitz's (1976) seminal work on competitive insurance markets with adverse selection, existence and characterization of the equilibrium outcome are still an open issue. We model a basic extension to the Rothschild and Stiglitz model: we endogenize up-front capital of insurers. Under limited liability, low up-front capital gives rise to an aggregate endogenous insolvency risk, which introduces an externality among customers of an insurer (Faynzilberg, 2006). It is shown that an equilibrium with the second-best efficient Miyazaki-Wilson-Spence allocation always exists.
Registros relacionados: En: The Journal of risk and insurance. - Nueva York : The American Risk and Insurance Association, 1964- = ISSN 0022-4367. - 01/03/2019 Volumen 86 Número 1 - marzo 2019 , p. 165-181
Autores secundários: Wambach, Achim
Outras classificações: 6
Direitos: In Copyright (InC): http://rightsstatements.org/vocab/InC/1.0/