Supplementary Insurance with Ex-Post Moral Hazard: Efficiency and Redistribution

Barigozzi, Francesca (2004) Supplementary Insurance with Ex-Post Moral Hazard: Efficiency and Redistribution. Bologna: Dipartimento di Scienze economiche DSE, p. 26. DOI 10.6092/unibo/amsacta/4769. In: Quaderni - Working Paper DSE (521). ISSN 2282-6483.
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Abstract

This paper investigates the topping-up scheme in health insurance when both public and private firms use linear contracts. First, the case with identical consumers is analyzed. The optimal public coverage is derived both when the firms play simultaneously and when they play sequentially. In the former case consumers are over-insured, whereas, in the latter case, the second-best allocation is obtained. Then, consumers’ heterogeneity is introduced: consumers differ in their wage rate and labour supply is endogenous. It is assumed that public coverage is uniform and health expenditures are financed by linear taxation. Results show that, in the sequential game, the optimal public coverage is negative and consumers are under-insured.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Barigozzi, Francesca
Keywords
private and public health insurance, ex-post moral hazard, topping-up, redistribution.
Subjects
ISSN
2282-6483
DOI
Deposit date
10 Mar 2016 10:39
Last modified
10 Mar 2016 10:39
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