Competition leverage: how the demand side affects optimal risk adjustment
研究了在不完全竞争的健康保险市场中，当高风险消费者比低风险消费者更不倾向于更换保险公司时，如何设计最优风险调整机制，发现过度补偿高风险者才能实现最优，且降低补贴差异可通过竞争杠杆提升消费者福利。
We study optimal risk adjustment in imperfectly competitive health insurance markets when high‐risk consumers are less likely to switch insurer than low‐risk consumers. Insurers then have an incentive to select even if risk adjustment perfectly corrects for cost differences. To achieve first best, risk adjustment should overcompensate insurers for serving high‐risk agents. Second, we identify a trade‐off between efficiency and consumer welfare. Reducing the difference in risk adjustment subsidies increases consumer welfare by leveraging competition from the elastic low‐risk market to the less elastic high‐risk market. Third, mandatory pooling can increase consumer surplus further, at the cost of efficiency.