1,658 research outputs found

    Costly risk verification without commitment in competitive

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    Cet article analyse l'√©quilibre d'un march√© d'assurances o√Ļ les individus qui souscrivent une police d'assurance ont une obligation de bonne foi lorsqu'ils r√©v√®lent une information priv√©e sur leur risque. Les assureurs peuvent, √† un certain co√Ľt, v√©rifier le type des assur√©s qui pr√©sentent une demande d'indemnit√© et ils sont autoris√©s √† annuler r√©troactivement le contrat d'assurance s'il est √©tabli que l'assur√© avait pr√©sent√© son risque de mani√®re incorrecte lorsqu'il avait souscrit la police d'assurance. Toutefois les assureurs ne peuvent s'engager sur leur strat√©gie de v√©rification du risque. L'article analyse la relation entre l'optimalit√© de Pareto de second rang et l'√©quilibre concurrentiel du march√© de l'assurance dans un cadre de th√©orie des jeux. Il caract√©rise les contrats offerts √† l'√©quilibre, les choix de contrat par les individus ainsi que les conditions d'existence de l'√©quilibre.

    Participating insurance contracts and the Rothschild-Stiglitz equilibrium puzzle

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    We show that an equilibrium always exists in the Rothschild-Stiglitz insurance market model with adverse selection when insurers can offer either non- participating or participating policies, i.e. insurance contracts which may involve policy dividends or supplementary calls for premium. The equilibrium coincides with the Miyazaki- Spence-Wilson equilibrium, which may involves cross-subsidization between contracts within subgroups of individuals. The paper establishes that participating policies act as an implicit threat that dissuades deviant insurers who aim at attracting low risk individuals only. The model predicts that the mutual corporate form should be prevalent in insurance markets or submarkets where second-best Pareto efficiency requires cross-subsidization between risk types. Stock insurers and mutuals may coexist, with stock insurers offering insurance coverage at actuarial price and mutuals cross-subsidizing risks.

    Natural disaster insurance and the equity-efficiency trade-off

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    Cet article analyse le r√īle de l'assurance priv√©e dans la pr√©vention et la r√©duction des dommages des catastrophes naturelles. Nous caract√©risons le dilemme √©quit√©-efficacit√© auquel sont confront√©s les d√©cideurs politiques dans un contexte d'information imparfaite sur les co√Ľts individuels de pr√©vention. Il est montr√© qu'un march√© concurrentiel d'assurance avec une tarification actuarielle, associ√© √† des transferts sous forme de taxe ou de subvention, domine vraisemblablement les r√®gles de tarification uniforme de l'assurance ou les sch√©mas d'indemnisation financ√©e par l'Etat. Le mod√®le montre comment des taxes diff√©renti√©es sur les contrats d'assurance peuvent accro√ģtre les incitations √† la pr√©vention, tout en faisant b√©n√©ficier d'un transfert compensateur les individus dont les co√Ľts de pr√©vention sont √©lev√©s. L'article met aussi l'accent sur la compl√©mentarit√© entre les incitations individuelles par la fiscalit√© et les incitations collectives par l'attribution de subventions aux collectivit√©s locales qui mettent en place des politiques de pr√©vention des risques de catastrophes naturelle

    Optimal risk financing in large corporations through insurance captives

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    A captive is an insurance or reinsurance company established by a parent group to finance its own risks. Captives mix internal risk pooling between the business units of the parent group and risk transfer toward the reinsurance market. We analyze captives from an optimal insurance contract perspective. The paper considers the vertical contractual chain that links firstly business units to insurance captives or to "fronters" through insurance contracts, secondly fronters to reinsurance captives through the cession of risks and thirdly insurance or reinsurance captives to reinsurers through cessions or retrocessions. In particular, the risk cession by fronters to a reinsurance captive trades o¤ the benefits derived from recouped premiums and from the risk sharing advantage of an "umbrella reinsurance policy", against the risks that result from the captive liabilities. The optimal captive scheme depends on the price of coverage in insurance and reinsurance markets and on the parent group's corporate capital. Since these variables fluctuate across time, the analysis developed in this paper corroborates the intertemporal variability of captives activity.self-insurance, captive, reinsurance, risk management

    A Theory of BOT Concession Contracts

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    In this paper, we discuss the choice for build-operate-and-transfer (BOT) concessions when governments and …rm managers do not share the same information regarding the operation characteristics of a facility. We show that larger shadow costs of public funds and larger information asymmetries entice governments to choose BOT concessions. This result stems from a trade-o¤ between the government’s shadow costs of …nancing the construction and the operation of the facility and the excessive usage price that the consumer may face during the concession period. The incentives to choose BOT concessions increase as a function of ex-ante informational asymmetries between governments and potential BOT concession holders and with the possibility of transferring the concession cost characteristics to public …rms at the termination of the concession.Public-private-partnership, privatization, adverse selection, regulation, natural monopoly, infrastructure, facilities

    Bank secrecy, illicit money and offshore financial centers

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    This paper discusses the effects of pressure policies on offshore financial centers as well as their ability to enforce the compliance of those centers with anti-money laundering regulations. Offshore banks can be encouraged to comply with rigorous monitoring of an investor's identity and the origin of his/her funds when pressure creates a sufficiently high risk of reputational harm to the investor. We show that such pressure policies harm both offshore and onshore investors and can benefit both the bank industry and tax administrations. We show that social optimal pressure policies are dichotomous decisions between no pressure at all and a pressure great enough to persuade offshore banks to comply. The delegation of pressure policies to onshore tax institutions may be inefficient. Deeper financial integration fosters compliance by the offshore center.money laundering, offshore banking, compliance

    The price of silence tradeable noise permits and airports

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    This paper presents a market design for the management of noise disturbance created by aircraft traffic around large airports. A market for tradable noise permits allows noise generators to compensate harmed residents. We show that the noise permit markets allow the achievement of the planner's optimal allocation of flights provided that she/he does not over-weight the benefit of economic activity compared to the disutility of noise disturbances. The fact that zones are likely to be strategic players does not fundamentally alter this finding. Because of the market auctioneer's information constraints, noise permits are likely to redistribute windfall gains to residents located in non-critical zones. This entices landlords to increase their land/house rents there and to design smaller houses in the long run.

    Labor Market Pooling, Outsourcing and Labor Contracts

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    Economic regions, such as urban agglomerations, face external demand and price shocks that produce income risk. Workers in large and diversified agglomerations may benefit from reduced wage volatility, while firms may outsource the production of intermediate goods and realize benefits from Chamberlinian externalities. Firms may also protect workers from wage risks through fixed wage contracts. This paper explores the relationships between firms' risks, workers' contracts, and the structure of production in cities.labor market, labor contracts, Chamberlinian externalities

    On spatial equilibria in a social interaction model

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    Social interactions are at the essence of societies and explain the gathering of individuals in villages, agglomerations, or cities. We study the emergence of multiple agglomerations as resulting from the interplay between spatial interaction externalities and competition in the land market. We show that the geographical nature of the residential space tremendously affects the properties of spatial equilibria. In particular, when agents locate on an open land strip (line segment), a single city emerges in equilibrium. In contrast, when the spatial economy extends along a closed land strip (circumference), multiple equilibria with odd numbers of cities arise. Spatial equilibrium configurations involve a high degree of spatial symmetry in terms of city size and location, and can be Pareto-ranked.social interaction, multiple agglomerations, spatial economy
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