Livestock Disease Indemnity Design When Moral Hazard Is Followed by Adverse Selection
研究政府如何在信息不对称下设计牲畜疾病赔偿，激励养殖户在疫情前采取生物安全措施并在疫情后如实报告感染，分析风险分担与效率的权衡。
Abstract Averting or limiting the outbreak of infectious disease in domestic livestock herds is an economic and potential human health issue that involves the government and individual livestock producers. Producers have private information about preventive biosecurity measures they adopt on their farms prior to outbreak ( ex ante moral hazard), and following outbreak they possess private information about whether or not their herd is infected ( ex post adverse selection). We investigate how indemnity payments can be designed to provide incentives to producers to invest in biosecurity and report infection to the government in the presence of asymmetric information. We compare the relative magnitude of the first‐ and second‐best levels of biosecurity investment and indemnity payments to demonstrate the tradeoff between risk sharing and efficiency, and we discuss the implications for status quo U.S. policy.