On-Demand Insurance

Item Type Conference or Workshop Item (Paper)
Abstract On-demand insurance contracts are crucial for the sharing economy. These contracts make use of a simple mechanism in a practical way: People differ in their frequency of exposure as well as the probability of loss; the extra dimension of heterogeneity can be used to screen the insured which leads to welfare improvements (the utility possibility frontier shifts outward). The conditioning on time periods relaxes the incentive compatibility constraint, since high frequency types are risking being uncovered for some time by choosing a different contract. We provide sufficient conditions when a full coverage equilibrium is reached. We also analyze various types of on-demand contracts which are used in practice, both in a Rothschild-Stiglitz and in a Wilson-Miyasaki-Spence framework.
Authors Braun, Alexander; Häusle, Niklas Matthias & Thistle, Paul
Language English
Subjects economics
finance
HSG Classification contribution to scientific community
Event Title EGRIE 2022
Event Location Vienna
Event Dates 18.09.2022-22.09.2022
Depositing User M.Sc Niklas Matthias Häusle
Date Deposited 17 Oct 2022 08:31
Last Modified 03 Feb 2023 01:27
URI: https://www.alexandria.unisg.ch/publications/267599

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Braun, Alexander; Häusle, Niklas Matthias & Thistle, Paul: On-Demand Insurance. - EGRIE 2022. - Vienna.

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https://www.alexandria.unisg.ch/id/eprint/267599
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