TY  - UNPD
A1  - Huang, Rachel J.
A1  - Muermann, Alexander
A1  - Tzeng, Larry Y.
T1  - Hidden regret in insurance markets: adverse and advantageous selection
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2008,38
N2  - We examine insurance markets with two types of customers: those who regret suboptimal decisions and those who don.t. In this setting, we characterize the equilibria under hidden information about the type of customers and hidden action. We show that both pooling and separating equilibria can exist. Furthermore, there exist separating equilibria that predict a positive correlation between the amount of insurance coverage and risk type, as in the standard economic models of adverse selection, but there also exist separating equilibria that predict a negative correlation between the amount of insurance coverage and risk type, i.e. advantageous selection. Since optimal choice of regretful customers depends on foregone alternatives, any equilibrium includes a contract which is o¤ered but not purchased.
T3  - CFS working paper series - 2008, 38 
KW  - asymmetric information
KW  - regret
KW  - insurance
KW  - Versicherungsmarkt
KW  - Versicherungsnehmer
KW  - Entscheidung
Y1  - 2008
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/6061
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-60654
ER  -