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|Title:||A theory of the demand for underwriting||Authors:||Kamiya, Shinichi
Browne, Mark J.
|Keywords:||DRNTU::Business::Finance::Insurance policies||Issue Date:||2012||Source:||Browne, M. J., & Kamiya, S. (2012). A theory of the demand for underwriting. Journal of risk and insurance, 79(2), 335-349.||Series/Report no.:||Journal of risk and insurance||Abstract:||We examine the demand for underwriting and its effect on equilibrium in an insurance market in which insureds know their risk type, but insurers do not. Our analysis indicates that a set of policies including one that requires buyers to take an underwriting test can constitute a full coverage Nash equilibrium when perfect classification is possible. We also find that underwriting equilibria, in which low risks obtain greater coverage than they would without underwriting, widely exist in a Wilsonian market with nonmyopic insurers. Our findings provide a potential explanation for why empirical evidence on adverse selection is mixed.||URI:||https://hdl.handle.net/10356/99238
|ISSN:||0022-4367||DOI:||10.1111/j.1539-6975.2011.01436.x||Fulltext Permission:||none||Fulltext Availability:||No Fulltext|
|Appears in Collections:||NBS Journal Articles|
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