Background Risk and the Performance of Insurance Markets under Adverse Selection

Background risk can influence the performance of insurance markets that must deal with adverse selection when applicants are risk vulnerable, since they are more averse to bearing the insurable risk as a result of their exposures to background risk. We show that background risk always results in a lower deductible for the incentive constrained contract, and that a broader range of markets attains the stable sequential equilibrium cross-subsidized pair of separating contracts. We conclude that background risk always improves the performance of markets for coverage against (insurable) foreground risks that must deal with adverse selection. We also find, however, that these improvements are never sufficient to offset the cost to insureds of bearing the background risk.     

人民币区域化和海峡两岸货币合作机制问题

本文分析并预测了人民币在周边国家和地区成为可兑换货币的情况，研究了人民币在台湾地区流通现状，探讨了发挥港澳金融中心和纽带的作用，促进海峡两岸直接通汇和扩大人民币在对台贸易、投资、旅游等的使用范围，提出建立海峡两岸统一货币机制和“华元”的可行性和设想。