On Rothschild–Stiglitz as Competitive Pooling |
| |
Authors: | Alberto Martin |
| |
Institution: | (1) CREI and Universitat Pompeu Fabra, 25–27 Ramon Trias Fargas, Barcelona, 08005, Spain |
| |
Abstract: | Dubey and Geanakoplos (Q J Econ 117:1529–1570, 2002) have developed a theory of competitive pooling, which incorporates adverse
selection and signaling into general equilibrium. By recasting the Rothschild–Stiglitz model of insurance in this framework,
they find that a separating equilibrium always exists and is unique.
We prove that their uniqueness result is not a consequence of the framework, but rather of their definition of refined equilibria.
When other types of perturbations are used, the model allows for many pooling allocations to be supported as such: in particular,
this is the case for pooling allocations that Pareto dominate the separating equilibrium. |
| |
Keywords: | Competitive pooling Insurance Adverse selection Signalling Refined equilibrium Separating equilibrium |
本文献已被 SpringerLink 等数据库收录! |
|