Efficient Competitive Equilibria with Adverse Selection
نویسندگان
چکیده
منابع مشابه
Efficient Competitive Equilibria with Adverse Selection
Do Walrasian markets function orderly in the presence of adverse selection? In particular, Is their outcome efficient when exclusive contracts are enforceable? This paper addresses these questions in the context of a Rothschild and Stiglitz insurance economy. We identify an externality associated with the presence of adverse selection as a special form of consumption externality. Consequently, ...
متن کاملEfficient Equilibria in Economies with Adverse Selection
In economies with Adverse Selection the existing Competitive Equilibrium concept ([10]) imply either that the equilibrium does not exist, or that it is not necessarily efficient. We introduce and analyze, within the Rotschild and Stiglitz model of Adverse Selection, a competitive notion of equilibrium, a constrained competitive equilibrium, which yields a unique and constrained efficient alloca...
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We construct a fully specified extensive form game that captures competitive markets with adverse selection. In particular, it allows firms to offer any finite set of contracts, so that cross-subsidization is not ruled out. Moreover, firms can withdraw from the market after initial contract offers have been observed. We show that a subgame perfect equilibrium always exists and that, in fact, wh...
متن کامل"Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard", with
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متن کاملPareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard
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ژورنال
عنوان ژورنال: Journal of Political Economy
سال: 2006
ISSN: 0022-3808,1537-534X
DOI: 10.1086/503754