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Articles 31 - 34 of 34
Full-Text Articles in Economics
Default And Punishment In General Equilibrium, Pradeep Dubey, John Geanakoplos, Martin Shubik
Default And Punishment In General Equilibrium, Pradeep Dubey, John Geanakoplos, Martin Shubik
Cowles Foundation Discussion Papers
We extend the standard model of general equilibrium with incomplete markets to allow for default and punishment by thinking of assets as pools. The equilibrating variables include expected delivery rates, along with the usual prices of assets and commodities. By reinterpreting the variables, our model encompasses a broad range of adverse selection and signalling phenomena (including the Rothschild-Stiglitz insurance model) in a general equilibrium framework. In contrast to game-theoretic models of adverse selection, our perfectly competitive framework eliminates the need for lenders to compute how the size of their loan or the price they quote might affect default rates. The …
Default In A General Equilibrium Model With Incomplete Markets, Pradeep Dubey, John Geanakoplos, Martin Shubik
Default In A General Equilibrium Model With Incomplete Markets, Pradeep Dubey, John Geanakoplos, Martin Shubik
Cowles Foundation Discussion Papers
We extend the standard model of general equilibrium with incomplete markets (GEI) to allow for default. The equilibrating variables include aggregate default levels, as well as prices of assets and commodities. Default can be either strategic, or due to ill-fortune. It can be caused by events directly affecting the borrower, or indirectly as part of a chain reaction in which a borrower cannot repay because he himself has not been repaid. Each asset is defined by its promises A , the penalties lambda for default, and the limitations Q on its sale. The model is thus named GE ( A …
Information And Dynamic Adjustment In Life Insurance, Mattias K. Polborn, Mike Hoy, Asha Sadanand
Information And Dynamic Adjustment In Life Insurance, Mattias K. Polborn, Mike Hoy, Asha Sadanand
Department of Economics Research Reports
No abstract provided.
A Model Of The Impact Of Reimbursement Schemes On Health Plan Choice, Emmett Keeler, Grace Carter, Joseph Newhouse
A Model Of The Impact Of Reimbursement Schemes On Health Plan Choice, Emmett Keeler, Grace Carter, Joseph Newhouse
Emmett Keeler
Flat capitation (uniform prospective payments) makes enrolling healthy enrollees profitable to health plans. Plans with relatively generous benefits may attract the sick and fail through a premium spiral. We simulate a model of idealized managed competition to explore the effect on market performance of alternatives to flat capitation such as severity-adjusted capitation and reduced supply-side cost-sharing. In our model flat capitation causes severe market problems. Severity adjustment and to a lesser extent reduced supply-side cost-sharing improve market performance, but outcomes are efficient only in cases in which people bear the marginal costs of their choices.