Competition and Insurance Twenty Years Later

We are honored to address the European Group of Risk and Insurance Economists and will take the opportunity to make some reflections on the rather uneasy relationship between insurance and competition. Economists generally prescribe competition as a solution for markets that do not work well. Competition allocates resources efficiently and encourages innovation and attention to what customers want. Insurance markets differ from most other markets because in insurance markets competition can destroy the market rather than make it work better. One of the dimensions along which insurance companies compete is underwriting--trying to ensure that the risks covered are "good" risks or that if a high risk is insured, the premium charged is at least commensurate with the potential cost. The resulting partitioning of risk limits the amount of insurance that potential insurance customers can buy. In the extreme case, such competitive behavior will destroy the insurance market altogether. A simple model illustrates

Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information

This paper analyzes competitive markets in which the characteristics of the commodities exchanged are not fully known to at least one of the parties to the transaction and suggests that the comforting myth that serious consideration of costs of communication, imperfect knowledge, and the like complicate without informing is false. Some of the most important conclusions of economic theory are not robust to considerations of imperfect information. We are able to show that not only may a competitive equilibrium not exist, but when equilibria do exist, they may have strange properties

Nitrous Oxide sedation for intra-articular injection in juvenile idiopathic arthritis

<p>Abstract</p> <p>Background</p> <p>Intra-articular corticosteroid injection in juvenile idiopathic arthritis (JIA) is often associated with anxiety and pain. Recent reports advocate the use of nitrous oxide (NO), a volatile gas with analgesic, anxiolytic and sedative properties.</p> <p>Objective</p> <p>To prospectively evaluate the effectiveness and safety of NO analgesia for intra-articular corticosteroid injection in JIA, and to assess patients and staff satisfaction with the treatment.</p> <p>Methods</p> <p>NO was administered to JIA patients scheduled for joint injection. The patient, parent, physician and nurse completed visual-analog scores (VAS) (0–10) for pain, and a 5-point satisfaction scale. Change in heart rate (HR) during the procedure was recorded in order to examine physiologic response to pain and stress. Patient's behavior and adverse reactions were recorded.</p> <p>Results</p> <p>54 procedures (72 joints) were performed, 41 females, 13 males; 39 Jewish, 13 Arab; mean age was 12.2 ± 4.7 year. The median VAS pain score for patients, parents, physicians and nurses was 3. The HR increased ≥ 15% in 10 patients. They had higher VAS scores as evaluated by the staff. The median satisfaction level of the parents and staff was 3.0 and 5.0 respectively. Adverse reactions were mild.</p> <p>Conclusion</p> <p>NO provides effective and safe sedation for JIA children undergoing intra-articular injections.</p

Stochastic Capital Theory I. Comparative Statics

Introductory lectures on capital theory often begin by analyzing the following problem: I have a tree which will be worth X(t) if cut down at time t. If the discount rate is r, when should the tree be cut down? What is the present value of such a tree? The answers to these questions are straightforward. Since at time t a tree which I plan to cut down at time T is worth e[to the power of rt]e[to the power of ?rT]X(T), I should choose the cutting date T* to maximize e[to the power of -rT]X(T); at t