Authors
Pierre‐André Chiappori, Bruno Jullien, Bernard Salanié, Francois Salanie
Publication date
2006/12
Journal
The RAND Journal of Economics
Volume
37
Issue
4
Pages
783-798
Publisher
Blackwell Publishing Ltd
Description
Several recent articles on empirical contract theory and insurance have tested for a positive correlation between coverage and ex post risk, as predicted by standard models of pure adverse selection or pure moral hazard. We show here that the positive correlationproperty can be extended to general setups: competitive insurance markets and cases where risk aversion is public. We test our results on a French dataset. Our tests confirm that the estimated correlation is positive; they also suggest the presence of market power.
Total citations
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Scholar articles
PA Chiappori, B Jullien, B Salanié, F Salanie - The RAND Journal of Economics, 2006