Firm Size Distribution: Testing the "Independent Submarkets Model" in the Italian Motor Insurance Industry

This paper tests the presence of multiple independent submarkets in the Italian motor insurance industry. Independence is motivated by administrative boundaries among provinces and by further locational reasons. We find that the independence effects are sufficient to induce a minimum degree of inequality in the size distribution of firms once submarkets are aggregated. These results are fully consistent with the predictions of Sutton (1998). We also show that the degree of skewness in the firms size distribution is related to characteristics such as the population living in an area, its density and the riskiness of a submarket.Size distribution of firms, independent submarkets, insurance companies

Collective Risks in Local Administrations: Can a Private Insurer Be Better than a Public Mutual Fund?

In this paper we consider the institutional arrangements needed in a decentralised framework to cope with the potential adverse welfare effects caused by localized negative shocks (e.g., natural disasters, terrorist attacks, or even clinical errors) that can be limited by precautionary investments. We model the role of a public mutual fund to cover these “collective risks”. We start from the under-investment problem stemming from the moral hazard of Local administrations when the fund is managed by the Central government, which also takes into account the equalisation of resources across administrations. We then study the potential role of private insurers in solving the under-investment problem. Our analysis shows that the public fund is always superior to the private insurance solution in the presence of hard budget constraints. However, when the Central government cannot credibly commit to an optimal transfer rule, private insurers are sometimes able to improve on the public mutual fund solution by inducing a higher level of investments.intergovernmental relations, private insurer, collective risks

Fiscal Responsibility in Autonomous Districts: New Profiles of Representation in the Case of the Special Regions of Italy

The essay deals with the difficult relationship between fiscal responsibility and representation: it seems that the traditional rule “no taxation without representation” is less and less true, as the responsibility of the representatives, be they those of the national parliament or of the representative bodies of local institutions, is no longer a real guarantee. The case of the Italian system is significant: local taxes have been interpreted in a very singular way by the constitutional case law, as the representatives’ responsibility connected with local government levies is limited to the determining only of certain aspects of the fiscal phenomenon. One first goal is therefore to analyse the atypical fiscal and financial responsibility of local administrators. But a specific phenomenon of the Italian Regions with a special level of autonomy deserves attention. These special Regions have negotiated with the central government a specific regime: since the constitutional implementation process of 2009, they dispose of undeniably high percentages of their territories’ tax revenue. The profiles of derived finance have been eliminated and it has been decided to return to the self-financing model, understood as the prevailing allocation in a fixed share of tax revenues produced within the territory. The case of the special regional revenues of Trentino-Alto Adige is a peculiar one and it is specifically studied in this essay. This work discusses the question of representation regarding tax revenues in a different way, based on a particular type of relation between the wealthproducing context and the institutions

Optimal risk allocation in the provision of local public services: can a private insurer be better than a public mutual fund?

In this paper we consider the institutional arrangements needed in a decentralised framework to cope with the potential adverse welfare effects caused by localized negative shocks, that impact on the provision of public services and that can be limited by precautionary investments. We model the role of a public mutual fund to cover these “collective risks”. We first study the under-investment problem stemming from the moral hazard of Local administrations, when investments are defined at the local level and are not observable by the Central government that manages the mutual fund. We then examine the potential role of private insurers in solving the underinvestment problem. Our analysis shows that the public fund is almost always superior to the private insurance solution

Wetting transitions in polydisperse fluids

The properties of the coexisting bulk gas and liquid phases of a polydisperse fluid depend not only on the prevailing temperature, but also on the overall parent density. As a result, a polydisperse fluid near a wall will exhibit density-driven wetting transitions inside the coexistence region. We propose a likely topology for the wetting phase diagram, which we test using Monte Carlo simulations of a model polydisperse fluid at an attractive wall, tracing the wetting line inside the cloud curve and identifying the relationship to prewetting.Comment: 4 Pages, 4 figures. Accepted for publication in Physical Review Letter