Publications

Authors:

Cannon, Edmund; Cipriani, Giam Pietro; Bazar Rosen, Katia

Title:

More for less? Puzzling selection effects in the insurance market

Year:

2016

Type of item:

Articolo in Rivista

Tipologia ANVUR:

Articolo su rivista

Language:

Inglese

Format:

A Stampa

Referee:

Sì

Name of journal:

Oxford Economic Papers

ISSN of journal:

0030-7653

N° Volume:

68

Number or Folder:

4

Page numbers:

879-897

Keyword:

Insurance market; adverse selection; pricing anomalies

Short description of contents:

We document a large and persistent anomaly in the UK car insurance market over the period 2012–13: insurance companies charged a higher premium for third-party (liability) insurance than comprehensive insurance (which includes third party). Furthermore, some companies charged higher premiums for comprehensive poli- cies with larger deductibles. In contrast to current theories of adverse or propitious selection, our evidence suggests both that consumers are too confused or too poorly informed to arbitrage between policy types and that sellers of car insurance do not implement the incentive-compatibility constraints at the heart of consumer demand theory. This particular insurance market is much less sophisticated than that characterized by modern microeconomic theory.

Product ID:

95064

Handle IRIS:

11562/955138

Last Modified:

November 25, 2022

Bibliographic citation:

Cannon, Edmund; Cipriani, Giam Pietro; Bazar Rosen, Katia, More for less? Puzzling selection effects in the insurance market «Oxford Economic Papers» , vol. 68 , n. 4 , 2016 , pp. 879-897

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