TY  - UNPD
A1  - Mimra, Wanda
A1  - Wambach, Achim
T1  - A note on uniqueness in game-theoretic foundations of the reactive equilibrium
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 483
N2  - Riley (1979)'s reactive equilibrium concept addresses problems of equilibrium existence in competitive markets with adverse selection. The game-theoretic interpretation of the reactive equilibrium concept in Engers and Fernandez (1987) yields the Rothschild-Stiglitz (1976)/Riley (1979) allocation as an equilibrium allocation, however multiplicity of equilibrium emerges. In this note we imbed the reactive equilibrium's logic in a dynamic market context with active consumers. We show that the Riley/Rothschild-Stiglitz contracts constitute the unique equilibrium allocation in any pure strategy subgame perfect Nash equilibrium.
T3  - CFS working paper series - 483 
KW  - asymmetric information
KW  - competitive insurance market
KW  - contract addition
KW  - reactive equilibrium
Y1  - 2014
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/35306
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-353062
UR  - http://ssrn.com/abstract=2515395
IS  - September 2014
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -