The Fraud Game of Forging the Loss and Optimal Insurance Contract Design
Xi Liu · Yunchou yu guanli · 2003
Based on the incomplete information dynamic game theory and mechanism design theory, this paper firstly constructs the fraud game model of forging the loss. Then, it studies the Nash Equilibrium of the game and how buyers and sellers choose the optimal game strategy. On the one hand, the price of insurance policy that is making zero expected profit for the insurer is educed; on the other hand, the optimal insurance contract based on the optimal game strategy for both buyers and sellers is discussed. It also proves that the partial insurance policy is the optimal insurance for both sides.