Coalition-Proof Allocations in Adverse-Selection Economies |
| |
Authors: | Jeffrey M Lacker and John A Weinberg |
| |
Institution: | (1) Research Department, Federal Reserve Bank of Richmond, Richmond, VA, 23261 |
| |
Abstract: | We reexamine the canonical adverse selection insurance economy first studied by Rothschild and Stiglitz 1976]. We define blocking in a way that takes private information into account and define a coalition-proof correspondence as a mapping from coalitions to allocations with the property that allocations are in the correspondence, if and only if, they are not blocked by any other allocations in the correspondence for any subcoalition. We prove that the Miyazaki allocation—the Pareto-optimal allocation (possibly cross-subsidized) most preferred by low-risk agents—is coalition-proof. |
| |
Keywords: | adverse selection coalition proof insurance |
本文献已被 SpringerLink 等数据库收录! |