Abstract
We conduct an experimental test of a screening model of an insurance market with asymmetric information. We first conduct three sessions in which the proportion of high risk buyers is such that a separating equilibrium should exist. We then conduct three more sessions in which the only change we make is decreasing the proportion of high risks such that the equilibrium is now a pooling equilibrium. In both treatments, the observed behavior converges to the equilibrium prediction.
Original language | English (US) |
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Pages (from-to) | 147-167 |
Number of pages | 21 |
Journal | GENEVA Risk and Insurance Review |
Volume | 32 |
Issue number | 2 |
DOIs | |
State | Published - Dec 2007 |
All Science Journal Classification (ASJC) codes
- Accounting
- Business, Management and Accounting (miscellaneous)
- Finance
- Economics and Econometrics