A theorem on multi-period insurance contracts without commitment

Authors
Vazquez, FJ Watt, R
Citation
Fj. Vazquez et R. Watt, A theorem on multi-period insurance contracts without commitment, INSUR MATH, 24(3), 1999, pp. 273-280
Citations number
5
Categorie Soggetti
Economics
Journal title
INSURANCE MATHEMATICS & ECONOMICS
ISSN journal
01676687 → ACNP
Volume
24
Issue
3
Year of publication
1999
Pages
273 - 280
Database
ISI
SICI code
0167-6687(19990528)24:3<273:ATOMIC>2.0.ZU;2-2
Abstract
In a multi-period setting that is equivalent to the classic Rothschild-Stig litz adverse selection situation, we prove that if insurers do not gather i nformation on accidents over time, then the inability to commit to contract renewals is sufficient for the optimal contract sequence to be periodic re petition of the Rothschild-Stiglitz single-period equilibrium. (C) 1999 Els evier Science B.V. All rights reserved. JEL classification: D8.