Replication data for: Pricing Institutions and the Welfare Cost of Adverse Selection

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Project Citation:

Weyl, E. Glen, and Veiga, André. Replication data for: Pricing Institutions and the Welfare Cost of Adverse Selection. Nashville, TN: American Economic Association [publisher], 2017. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114350V1

Project Description

Summary: To mitigate adverse selection in insurance markets, individuals are often mandated to buy at least a baseline plan, but may choose to opt into a premium plan. In some markets, such as US health exchanges, each plan is responsible for the full expenses of those who buy it ("total pricing"). In other markets, such as the privately supplied "Medigap" top-ups to traditional government-provided Medicare, premium providers are only responsible for the incremental expenses they top up ("incremental pricing"). For parameter values calibrated to health exchanges, the shift from total to incremental pricing reduces the welfare loss from adverse selection by an order of magnitude.

Scope of Project

JEL Classification:
      D82 Asymmetric and Private Information; Mechanism Design
      G22 Insurance; Insurance Companies; Actuarial Studies
      H51 National Government Expenditures and Health
      I13 Health Insurance, Public and Private
      I18 Health: Government Policy; Regulation; Public Health

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Published Versions

V1 [2019-10-12]

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