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Efficient nash equilibrium under adverse selection
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dc.contributor.author | Diasakos, Theodoros | |
dc.contributor.author | Koufopoulos, Kostas | |
dc.date.accessioned | 2013-10-16T14:31:03Z | |
dc.date.available | 2013-10-16T14:31:03Z | |
dc.date.issued | 2013-08 | |
dc.identifier.citation | Diasakos , T & Koufopoulos , K 2013 ' Efficient nash equilibrium under adverse selection ' School of Economics & Finance Discussion Paper 1313 , no. 1313 , University of St Andrews . | en |
dc.identifier.issn | 0962-4031 | |
dc.identifier.other | PURE: 38221489 | |
dc.identifier.other | PURE UUID: 6e58324e-5701-44be-a558-30983f2ebaf9 | |
dc.identifier.uri | https://hdl.handle.net/10023/4089 | |
dc.description.abstract | This paper revisits the problem of adverse selection in the insurance market of Rothschild and Stiglitz (QJE, 1976). We propose a simple extension of the game-theoretic structure in Hellwig (EER, 1987) under which Nash-type strategic interaction between the informed customers and the uninformed firms results always in a particular separating equilibrium. The equilibrium allocation is unique and Pareto-efficient in the interim sense subject to incentive-compatibility and individual rationality. In fact, it is the unique neutral optimum in the sense of Myerson (ECMA, 1983). | |
dc.format.extent | 65 | |
dc.language.iso | eng | |
dc.publisher | University of St Andrews | |
dc.relation.ispartofseries | School of Economics & Finance Discussion Paper 1313 | en |
dc.rights | (c) 2013 the authors | en |
dc.subject | Insurance market | en |
dc.subject | Adverse selection | en |
dc.subject | Incentive efficiency | en |
dc.subject | HG Finance | en |
dc.subject.lcc | HG | en |
dc.title | Efficient nash equilibrium under adverse selection | en |
dc.type | Working or discussion paper | en |
dc.description.version | Postprint | en |
dc.contributor.institution | University of St Andrews. School of Economics and Finance | en |
dc.identifier.url | http://ideas.repec.org/p/san/wpecon/1313.html | en |
dc.identifier.url | http://www.st-andrews.ac.uk/economics/repecfiles/4/1313.pdf | en |
dc.identifier.url | http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1944825 | en |
dc.identifier.url | http://www.carloalberto.org/assets/working-papers/no.215.pdf | en |
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