On moral hazard and nonexclusive contracts

Article dans une revue: We study an economy where intermediaries compete over contracts in a nonexclusive insurance market affected by moral hazard. In this context, we show that, contrarily to what is commonly believed, market equilibria may fail to be efficient even if the planner is not allowed to enforce exclusivity of trades (third best inefficiency). Our setting is the same as that of Bisin and Guaitoli [Bisin, A., Guaitoli, D., 2004. Moral hazard with nonexclusive contracts. Rand Journal of Economics 2, 306-328]. We hence argue that some of the equilibrium conditions they imposed are not necessary, and we exhibit a set of equilibrium allocations which fail to satisfy them.

Auteur(s)

Andrea Attar, Arnold Chassagnon

Revue
  • Journal of Mathematical Economics
Date de publication
  • 2009
Mots-clés JEL
D43 D82 G22
Mots-clés
  • Non-exclusivity
  • Insurance
  • Moral hazard
Pages
  • 511-525
Version
  • 1
Volume
  • 45