Monopoly, Non-linear Pricing, and Imperfect Information : A Reconsideration of the Insurance Market

Abstract

I reconsider Stiglitz's (1977) problem of monopolistic insurance with a continuum of types. Using a suitable transformation of control variables I obtain an analytical characterization of the optimal insurance policies. Closed form solutions and comparative statics results for special cases are provided.nonlinear pricing ; screening ; risk aversion