Multi-period insurance contracts

Russell Cooper, Beth Hayes

Research output: Contribution to journalArticlepeer-review

64 Scopus citations


This paper examines the form of insurance contracts in the presence of asymmetric information about consumers' accident probabilities. Our goal is to understand the adjustment in contract terms as a function of accident histories in a finite horizon model. We also compare these adjustments between alternative market structures. Our principal findings indicate that history dependent insurance contracts serve a useful sorting role. Individuals who declare themselves 'low risks' to insurance companies face adverse contractural terms if they subsequently have many accidents. These adjustments are strongest in the case of a single insurance seller but are present in the competitive model as well.

Original languageEnglish (US)
Pages (from-to)211-231
Number of pages21
JournalInternational Journal of Industrial Organization
Issue number2
StatePublished - 1987

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Aerospace Engineering
  • Economics and Econometrics
  • Economics, Econometrics and Finance (miscellaneous)
  • Strategy and Management
  • Industrial and Manufacturing Engineering


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