Adverse selection and insurance contracting: A rank-dependent utility analysis

Contributions to Theoretical Economics

Volumn 3, Issue 1, 2003, Pages

  Ryan, Matthew Joseph ^a   Vaithianathan, Rhema ^a  

^a UNIVERSITY OF AUCKLAND   (New Zealand)

Author keywords

Adverse Selection; Insurance; Rank Dependent Utility

Indexed keywords

EID: 14944346187     PISSN: 15345971     EISSN: 15345971     Source Type: Journal    
DOI: 10.2202/1534-5971.1074     Document Type: Article

References (28)

1. Abdellaoui, M. (2000): "Parameter-Free Elicitation of Utility and Probability Weighting Functions," Management Science 46, 1497-1512.
2. Camerer, C. and T.-H. Ho (1994): "Violations of the Betweenness Axiom and Non-linearity in Probability," Journal of Risk and Uncertainty 8, 167-196.
3. Chateauneuf, A and P. Wakker (1999): "An Axiomatization of Cumulative Prospect Theory for Decision Under Risk" Journal of Risk and Uncertainty 18, 137-145
4. Chew, S.H. (1983): "A Generalization of the Quasilinear Mean with Application to the Measurement of Income Inequality and Decision Theory Resolving the Allais Paradox," Econometrica 51, 1065-1092.
5. Chew, S.H., E. Karni and Z. Safra (1987): "Risk Aversion in the Theory of Expected Utility with Rank Dependent Probabilities," Journal of Economic Theory 42, 370-381.
6. Diecidue, E. and P.P. Wakker (2001): "On the Intiution of Rank-Dependent Utility," Journal of Risk and Uncertainty 23, 281-298.
7. Dupuis, A. and E. Langlais (1997): "The Basic Analytics of Insurance Demand and the Rank-Dependent Expected Utility Model," Finance 18, 47-74.
8. Ghirardato, P and M. Marinacci (2001): "Risk, Ambiguity, and the Separation of Utility and Beliefs," Mathematics of Operations Research 26, 864-890.
9. Gonzalez, R. and G. Wu (1999): "On the Shape of the Probability Weighting Function," Cognitive Psychology 38, 129-166.
10. Karni, E. (1995): "Non-Expected Utility and the Robustness of the Classical Insurance Paradigm: Discussion," Geneva Papers on Risk and Insurance Theory 20, 51-56.
11. Karni, E. and Z. Safra (1990): "Rank-Dependent Probabilities," Economic Journal 100, 487-495.
12. Kreps, D.M. (1990): A Course in Microeconomic Theory. Princeton University Press: Princeton, NJ.
13. Kunreuther and Hogarth (1989): "Risk, Ambiguity and Insurance," Journal of Risk and Uncertainty 2, 5-36.
14. Laffont, J.-J. and D. Martimort (2002): The Theory of Incentives: The Principal-Agent Model. Princeton University Press: Princeton, NJ.
15. Machina, M. (1995): "Non-Expected Utility and the Robustness of the Classical Insurance Paradigm," Geneva Papers on Risk and Insurance Theory 20, 9-50.
16. Quiggin, J. (1982): "A Theory of Anticipated Utility," Journal of Economic Behavior and Organization 3, 323-343.
17. Quiggin, J. (1991): "On the Optimal Design of Lotteries," Economica 58, 1-16.
18. Ryan, M.J. and R. Vaithianathan (2003): "Medical Insurance With Rank-Dependent Utility," Economic Theory 22, 689-698.
19. Segal, U. and A. Spivak (1990): "First Order versus Second Order Risk Aversion," Journal of Economic Theory 51, 111-125.
20. Shi, S. (1988): "Rothschild-Stiglitz Competitive Insurance Market Under Quasilinear Preferences," Economics Letters 27, 27-30.
21. Stiglitz, J. (1977): "Monopoly, Non-Linear Pricing and Imperfect Information: The Insurance Market," Review of Economic Studies 44, 407-430.
22. Tversky, A. and D. Kahneman (1992): "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty 5, 297-323.
23. Tversky, A. and P. Wakker (1995): "Risk Attitudes and Decision Weights," Econometrica 63, 1255-1280.
24. Wakker, P.P. (2001): "Testing and Characterizing Properties of Nonadditive Measures Through Violation of the Sure-Thing Principle," Econometrica 69, 1039-59.
25. Wakker, P.P., R.H. Thaler and A. Tversky (1997): "Probabilistic Insurance," Journal of Risk and Uncertainty 15, 7-28.
26. Wu, G. and R. Gonzalez (1996): "Curvature of the Probability Weighting Function," Management Science 42, 1676-1690.
27. Yaari, M.E. (1987): "The Dual Theory of Choice Under Risk," Econometrica 55, 95-115.
28. Young, V.R. and M.J. Browne (2001): "Equilibrium in Competitive Insurance Markets Under Adverse Selection and Yaari's Dual Theory of Risk," Geneva Papers on Risk and Insurance Theory 25, 141-157.