Repeated insurance contracts and moral hazard

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...

Full description

Saved in:
Bibliographic Details
Published in:Journal of economic theory 1983-06, Vol.30 (1), p.74-97
Main Authors: Rubinstein, Ariel, Yaari, Menahem E
Format: Article
Language:English
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary: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.
ISSN:0022-0531
1095-7235
DOI:10.1016/0022-0531(83)90094-7