MULTIPERIOD INSURANCE CONTRACTS UNDER ASYMMETRIC INFORMATION
Toru Haneda · Institutional Repositories DataBase (IRDB) · 1986
This paper examines the role of multiperiod insurance arrangements in alleviating the inefficiency associated with the adverse selection problem, in the case of both private insurance and public insurance.We argue that the inefficiency can reduced by making the insurance payment to an individual, in any given period, depend on the realized states of nature in preceding periods, and thus there is reason enough to use multiperiod insurance contracts in the face of asymmetric information.