Competitive Insurance Markets with Two Unobservables
研究竞争性保险市场中，客户在事故概率和风险规避程度两方面都存在差异时的筛选博弈，发现无差异曲线可能两次相交，导致传统分离均衡失效，出现混同或保费高于精算公平水平的分离均衡。
I study a screening game in a competitive insurance market in which insurance customers differ with respect to both accident probability and degree of risk aversion. It is shown that indifference curves of customers may cross twice; thus the single crossing property does not hold. When differences in risk aversion are sufficiently large, firms cannot use policy deductibles to screen high‐risk customers. Types may be pooled in equilibrium or are separated by raising premiums above actuarially fair levels. This leads to excessive entry of firms in equilibrium.