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An Economic Explanation of Insurance Intermediation

Part of the Contributions to Economics book series (CE)

Keywords

Information Asymmetry Search Cost Expected Profit Information Level Insurance Product 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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References

  1. 5.
    Rose (1999) is based on Hey (1981).Google Scholar
  2. 9.
    For a formal analysis, see Rose (1999, 248–249).Google Scholar
  3. 10.
    In some cases this can be done only numerically depending on the functions involved. For further details, see Rose (1999, 250–251).Google Scholar
  4. 12.
    For a more formal treatment, see Rose (1999, 115–120).Google Scholar
  5. 15.
    In contrast to the usually applied models of Bertrand price competition where fixed costs are zero and only positive marginal costs exist, in this model fixed costs for acquiring information are positive, whereas marginal costs for copying and disseminating information are zero. For more details, see Rose (1999, 142, fn.692).Google Scholar
  6. 17.
    But see Rose (1999, 156–160).Google Scholar
  7. 25.
    See Gravelle (1991; 1992; 1993) and section 3.3.1 for more details.Google Scholar
  8. 27.
    In case of a fixed-quality-level strategy, first both intermediaries fix their quality levels with Y1IY2I, then intermediary I1 decides on his optimal marketing efforts O1I. Intermediary I2 takes them into account when choosing his optimal efforts O2I. In the same way, the optimal values are determined when both intermediaries follow a quality-optimizing strategy. See Rose (1999, 146–147).Google Scholar

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© Physica-Verlag Heidelberg 2007

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