Repeated insurance contracts and moral hazard

Ariel Rubinstein, Menahem E. Yaari

    Research output: Contribution to journalArticle

    Abstract

    An attempt is made to account for the frequently observed phenomenon of insurance companies offering discounts to clients who possess a favorable record of past claims. We argue that such discounts provide a mechanism which enables both insurer and insured to counteract the inefficiency which arises from moral hazard.

    Original languageEnglish (US)
    Pages (from-to)74-97
    Number of pages24
    JournalJournal of Economic Theory
    Volume30
    Issue number1
    DOIs
    StatePublished - 1983

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    Moral hazard
    Discount
    Insurance contract
    Insurer
    Inefficiency
    Insurance companies

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Repeated insurance contracts and moral hazard. / Rubinstein, Ariel; Yaari, Menahem E.

    In: Journal of Economic Theory, Vol. 30, No. 1, 1983, p. 74-97.

    Research output: Contribution to journalArticle

    Rubinstein, Ariel ; Yaari, Menahem E. / Repeated insurance contracts and moral hazard. In: Journal of Economic Theory. 1983 ; Vol. 30, No. 1. pp. 74-97.
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